- Major indexes sold off into the close, but clung to modest gains. S&P 500 Index +0.2%, Dow +0.2%, Nasdaq +0.1%, Russell 2000 +0.5%.
- Energy led the sector field for a second session on tax-reform related optimism; rate-sensitive stocks again lagged.
- Treasury yields lower at the ends of the curve. 10-yr. note -1 basis point (-0.01%) to 2.48%; 30-yr. bond -4 basis points (-0.04%) to 2.84%.
- Positive breadth on NYSE (1.0:1); negative breadth on Nasdaq (1.0:1) with technology stocks falling.
- Commodities: WTI crude oil advanced again (+0.9% to $58.07/bbl.; gold +0.4% to $1269/oz.; industrial metals also gained.
- Economic data: Third revision of Q3 gross domestic product (GDP) slightly lower at 3.2%, initial jobless claims up but still low.
Overnight & This Morning
- Equities slightly lower ahead of Christmas holiday.
- European stocks trending lower midday. Spanish stocks getting battered with prelim indicators showing Separatist (pro-independence) party retaining slight majority after yesterday’s election.
- Asia mostly higher. Following U.S. trend with energy, banks leading. Oil pulled back overnight, but broader commodity gains underpinned buying. Shanghai Composite -0.1%, Hang Seng +0.7%, Nikkei +0.2%.
- Treasuries firm with 10-yr. note at 2.48%.
- Commodities: Overnight weakness in oil continuing (-0.6% to ~$58/bbl.), gold +0.3% to ~$1274/oz., industrial metals gaining.
- Economic data: building permits topped (1,303k vs. 1,298k), durable goods weak (+1.3% vs. +2.0%), personal consumption beat (+0.64% vs. +0.40%), personal income below (+0.3% vs. +0.4%).
Congress avoids a shutdown. Congress passed a stopgap spending bill late last night, allowing the government to continue to operate past its previous December 22 deadline, and avoid a holiday season shutdown. The measure finances the government through January 19, which gives both sides more time to negotiate a longer-term deal. As we outlined in a recent blog, government shutdowns have historically been a non-event for markets. However, that likely won’t stop the ongoing conversations from generating headlines, especially as the next deadline approaches.
Global rates jump, but what does that mean? The 10-year Treasury yield had been trading within a historically tight range since late October, but that all changed on December 19 as a confluence of events–some international and some domestic–helped move rates higher globally. Today on the LPL Research blog we look at the key drivers and potential implications.
Personal Income & Spending (Nov)
Durable Goods Orders (Nov)
Cap Goods Shipments & Orders (Nov)
Core PCE (Nov)
New Home Sales (Nov)
University of Mich. Sentiment (Dec)
Kansas City Fed Manufacturing Index (Dec)
UK: GDP (Q3)
Germany: Consumer Confidence (Jan)
France: PPI (Nov)
France: GDP (Q3)
Italy: Consumer Confidence (Dec)
UK: Current Account Balance (Q3)
Italy: Industrial Orders (Oct)