Market Update: Thursday, December 28, 2017


Market Recap

  • Domestic stocks gained slightly on another slow post-holiday trading day. S&P 500 Index +0.1%, Dow +0.1%, Nasdaq +0.05%.
  • Utilities and industrials outperformed, despite little overall dispersion among sectors; energy and telecommunications lagged.
  • Positive breadth on NYSE (1.3:1), Nasdaq positive (1.1:1); low-volume day (60% of 30-day average).
  • Treasury prices rose sharply; 10-yr. yield -5 basis points (0.05%) to 2.42%.
  • Commodities: WTI crude oil -0.6% to $59.62/bbl., COMEX gold +0.4% to $1292/oz., industrial metals mostly higher.

Overnight & This Morning

  • Major indexes opened higher; light action expected for the day as we approach the new year.
  • Europe mostly lower; dovish tilt to yesterday’s European Central Bank (ECB) economic bulletin (see details below). STOXX Europe 600 -0.05%, DAX -0.2%, CAC 40 -0.2%.
  • Asia mostly higher overnight. Bank of Japan continued its dovish monetary policy outlook, despite warning of possible side effects from extended easing. Shanghai Composite +0.6%, Hang Seng +0.9%, Nikkei -0.6%.
  • Treasury prices retraced some gains; 10-yr. yield +1 basis points (0.01%) to 2.43%.
  • Commodities: Oil (+0.1%) to $59.67/bbl., gold +0.1% to $1294/oz., industrial metals still climbing.
  • Domestic consumer confidence fell short of expectations (122.1 vs. 128), pending homes sales lagged as well (0.2% month over month vs. 0.5%).


Macro Notes

  • ECB economic bulletin reiterates need for ongoing stimulus. The ECB’s economic bulletin, which forms the basis for Governing Council decisions, stated that an ample degree of monetary accommodation is still needed to secure a return of inflation towards levels that are below, but close to, 2%. Despite calling for this continued policy accommodation, it was noted that recent strong cyclical momentum and a significant reduction of economic slack provide grounds for greater confidence that inflation will converge towards its 2% goal in the future. (Source: FactSet)


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  • Germany: CPI (Dec)
  • Eurozone: M3 Money Supply (Nov)
  • Italy: PPI (Nov)
  • Italy: Italian Nat’l Institute of Statistics Monthly Economic Note
  • Russia: GDP (Q3)

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