USA: On Wall Street, the Dow index is at its highest level since the beginning of the year

Thursday’s session on Wall Street ended with gains in the main indices. The Dow rose to its highest level since early 2023, gaining almost 9% in November. Investors analyze the latest macro data and monetary policy of central banks.

The Dow Jones Industrial rose at the close by 520 points, or 1.47%. and amounted to 35,950.89 points.

The S&P 500 increased by 0.38% at the end of the day. and amounted to 4,567.80 points.

The Nasdaq Composite lost 0.23%. and closed the session at 14,226.22 points.

The Dow closed November with an increase of 8.9%, breaking a series of three losing months in a row. The S&P 500 rose 8.9% in November, while the Nasdaq rose 10.7%. The indices recorded their best monthly results since July 2022.

The Dow is currently at its highest level since early 2023, and the S&P 500 and Nasdaq Composite are trading up around 1%. from its 2023 highs.

“In 2022, we spent so much time thinking about what could go wrong, and we didn’t really spend time thinking about what could go right. 2023 is a story of many things going right. “A lot of what we saw in November was just a realization that the economy is still doing well, that consumers are resilient and that the Fed is in limbo more than anything else,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

“Assuming these conditions persist through the end of the year – which is our most likely scenario – we believe the market will continue to move higher,” he added.

According to FedWatch CME Group, markets are fully pricing in no change in interest rates. at the Fed’s December meeting, and also estimate the probability of an interest rate cut. by 25 bp. in March at 46.3 percent

“The upcoming Fed statement may continue to emphasize the need to keep interest rates at current levels for some time,” said Hauke ​​Siemssen, monetary policy strategist at Commerzbank AG. According to CME Group’s FedWatch tool, markets are fully pricing in no change in interest rates. at the Fed’s December meeting, and also estimate the probability of an interest rate cut. by 25 bp. in March at 46.3 percent

“The Fed’s upcoming statement may continue to emphasize the need to keep interest rates at current levels for some time,” said Hauke ​​Siemssen, monetary policy strategist at Commerzbank AG.

Market valuations currently show that a 25 basis point cut in the European Central Bank’s interest rates. until April it is fully priced.

“So we see that expectations of interest rate cuts are gaining support in the market, although I think they are maybe a little bit exaggerated because I don’t think central banks will be swayed to cut rates early,” said Elwin de Groot, head of macroeconomic strategy Rabobank.

Joe Tuckey, head of currency research at Argentex Group, said the central bank’s latest forecast for average inflation of 3.2%. in 2024 and 2.1 percent in 2025 may not be adequate, and the latest reading creates a difficult environment for each of the hawks at the ECB. The latest ECB forecasts will be presented after the mid-December meeting.

“Markets are now starting to price in an April rate cut, and the Eurodollar price action in the coming weeks will be driven in part by the expected timing of the ECB rate cut relative to the expected cut by the Federal Reserve,” Tuckey said.

On Thursday, investors received a large portion of the latest macro data from the American economy.

The number of home sales contracts signed by Americans in October fell by 1.5%. month to month – reported the National Association of Realtors.

Wall Street analysts expected the number of home sale contracts to decline by 2%.

A month earlier, the number of signed contracts for the sale of houses (pending home sales) increased by 1%. mdm, after correction from +1.1%.

The manufacturing sector activity index (PMI) in the Chicago area increased to 55.8 points in November. with 44 points in last month. Analysts expected the index to reach 46 points.

The number of people applying for unemployment benefits for the first time last week in the US was 218,000. Economists expected the number of new unemployed to be 218,000. against 211 thousand previously, after correction from 209 thousand

The number of unemployed people continuing to receive benefits amounted to 1.927 million in the week that ended on November 18.

Analysts expected 1.865 million compared to the previously quoted 1.841 million, after correction from 1.84 million.

The PCE deflator in the US in October was 3%. y/y, compared to 3.4 percent y/y a month earlier and the consensus level was 3%.

The base rate was 3.5%. y/y vs 3.7 percent a month earlier and expectations at 3.5%. rdr. On a month-on-month basis, the PCE deflator was 0.0 percent, compared to 0.4 percent. a month earlier. 0.1 percent was expected.

Excluding food and energy prices, the PCE deflator was 0.2%. mdm vs. 0.3 percent mdm a month earlier. 0.2 percent was expected.

The PCE deflator (personal consumption expenditure deflator) is a measure of changes in prices of goods and services purchased by consumers. In the base approach, it does not take into account food and energy prices.

The PCE deflator is the Fed’s preferred measure of price growth. The Federal Reserve’s average inflation target is 2.0 percent.

American consumer spending in October increased by 0.2%. mdm, after an increase of 0.7 percent a month earlier. An increase of 0.2 percent was expected. mdm.

Americans’ incomes increased by 0.2%. compared to 0.3 percent a month earlier, after correction from +0.4%. Here the market expected an increase of 0.2%. mdm.

On the oil market, WTI contracts for January are trading at USD 75.63 per barrel, down 2.86%, and January Brent futures are down 0.30%. up to USD 82.85/b. (PAP)

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