S&P500 trading higher as US retail sales increased in November

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Note: Figures recorded at 7:45am AEDT. The closing figures and video recording will be available at 9:00am AEDT.

The Dow Jones Industrial Average edged higher on Thursday a day after closing above 37,000 for the first time ever as the 10-year Treasury tumbled below 4% and a surprise gain in retail sales gave investors further confidence 2024 would bring a soft economic landing.

The 30-stock Dow ticked up 124 points, or 0.3%. The S&P 500 added 0.2% while the Nasdaq Composite gained 0.1%.

Wall Street received fresh economic data on Thursday that helped fuel hopes for a soft landing. Retail sales increased 0.3% in November, the Commerce Department said on Thursday, in the latest sign that consumer spending remains strong as the holiday shopping season continues. Economists polled by Dow Jones forecast a decrease of 0.1%.

The 10-year Treasury note yield dropped below 4% for the first time since August as traders mounted bets on rate cuts for 2024. The move lower in interest rates follows the Dow’s more than 1% jump on Wednesday to reach a record high above 37,000 after the Federal Open Market Committee indicated it may cut rates three times next year.

Solar stocks ticked higher as yields fell. The Invesco Solar ETF (TAN) climbed more than 8%, with constituents SunRun and Enphase gaining 21% and 13%, respectively. Shares of Moderna climbed 9% after trial data showed its experimental cancer vaccine reduced the risk of death or reoccurrence when used alongside Merck’s Keytruda.

The S&P could soon join the Dow in record territory, as the index is less than 2% away from reaching its all-time close set in January of 2022. The Nasdaq is about 9% away from its closing record and roughly 10% further to go to reach its intraday record, respectively.

Moving on, the Bank of England and the European Central Bank decided to keep their interest rates unchanged, leading to stable share prices in Britain and Europe.

Both central banks resisted market expectations of rate cuts, with BoE Governor Andrew Bailey emphasising the need for a prolonged period of restrictive interest rate policy, while European Central Bank officials did not discuss the possibility of rate cuts, leading to increased focus on U.S. market dynamics and speculation about significant rate cuts there next year.

Figures around the globe

European markets closed mixed. London’s FTSE gained 1.33 per cent, Frankfurt lost 0.08 per cent, and Paris closed 0.59 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 0.73 per cent, Hong Kong’s Hang Seng gained 1.07 per cent while China’s Shanghai Composite closed 0.33 per cent lower.

The Australian share market closed 1.65 per cent higher at 7,377.86.

Dividends payable
Technology One Ltd (ASX:TNE)
Waterco Ltd (ASX:WAT)
National Australia Bank Ltd (ASX:NAB)
Nufarm Ltd (ASX:NUF)
Ava Risk Group Ltd (ASX:AVA)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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