Online Sales Surge Drives Holiday Spending Higher, Brent Crude at 11-Year Low

Nichole Harper
28 Dec, 2015
New York City

With sellers in control, oil prices turned lower in the last week and stocks followed. Market indexes on Wall Street declined as much as 0.6%. U.S. holiday spending rose more than expected and more shoppers shifted to online shopping.

[R]12:05 PM New York City, New York – With sellers in control, oil prices turned lower in the last week and stocks followed. Market indexes on Wall Street declined as much as 0.6%. U.S. holiday spending rose more than expected and more shoppers shifted to online shopping.[/R]

Stocks on Wall Street traded lower in the last week of the year after crude oil declined 3% and commodities traded new multi-year lows and holiday season sales were ahead of expectations.

Last week, broader indexes rose more than 2.5% following a brief surge in energy stocks.

On Wall Street, Tollbooth Strategy Index slipped 55.15 or 0.5% to 10,763.68.

S&P 500 index dropped 14.52 or 0.7% to 2,046.42 and the Nasdaq Composite Index decreased 39.95 or 0.8% to 5,008.62.

Crude oil in New York declined more than 3% $1.31 to $36.88 a barrel and gold slumped $6.51 to $1,069.59 an ounce.

Brent crude in London also declined 3% and dropped to an 11-year low to $36.77 a barrel and fell below the price of oil in New York on the weaker-than-expected demand from Japan and rising glut in the market.

Saudi Arabia, the largest exporter of oil announced plans on Monday to trim government deficit and diversify government revenue sources and float international bonds.

U.S. holiday shopping rose 7.9% according to the latest report released by MasterCard SpendingPulse report. The report tracks sales between Black Friday and Christmas Eve.

The increase in sales was driven by a 20% surge in online shopping.

However, the National Retail Federation, the retail industry group, estimates sales for November and December to increase 3.7% to $630.5 billion from a year ago period.

U.S. Movers

Amazon.com, Inc ((AMZN)) rose $3.71 to $666.50 after the online retailer and marketplace operator said approximately 3 million new members signed up Prime member services in the last week.

Apple Inc ((AAPL)) fell $1.03 to $107 and the computer, mobile and media devices maker sued South Korean rival Samsung for additional $180 million damages related to the long-standing patents case.

Last week, Samsung agreed to pay $548 million for infringing iPhone patents and designs.

Chimerix Inc ((CMRX)) tumbled 77.1% or $27.44 to $8.14 after the oral antiviral drugs maker said that the Phase 3 trial of a drug used to prevent infections following blood and marrow transplants did not significantly reduce certain infection in stem cell transplant patients.

Iconix Brand Group Inc ((ICON)) plunged 21.7% or $1.61 to $5.84 after the apparel and accessories distributor received a formal order of investigation from the security and exchange commission related to accounting treatment for the formation of certain joint ventures.

European Markets

Trading remained subdued in Europe on the first trading day after Christmas as investors avoided making large moves in the holiday-shortened week.

Major markets traded lower in the afternoon as the latest Chinese economic data added to the concerns for the global economy.

The profits of Chinese industrial companies in November fell 1.4% from the previous year, indicating the sixth consecutive month of decline, according to China National Bureau of Statistics.

Nevertheless, November data represent an improvement from the previous month, when Chinese industrial profits fell 4.6% from a year earlier.

In London, the stock exchange was closed for the Boxing Day holiday.

In Frankfurt the DAX index fell 62.04 or 0.6% to 10,665.53 and in Paris, CAC 40 index slipped 37.79 or 0.8% to 4,628.88.

adidas AG slipped 1.6% to €88.77 after the German sport products maker’s CFO Robin J. Stalker said negative currency effects in 2016 may increase sourcing costs with approximately €500 million.

Banca Monte dei Paschi di Siena SpA surged 1.8% to €1.27 after the third-largest Italian bank sold its non-performing loan portfolio with book value of €1 billion to Epicuro SPV Srl, a securitization business financed by affiliates of Deutsche Bank AG.

The transaction is expected to close by the end of this month.

Asian Markets

The Nikkei 225 average closed higher as bargain-hunting offset disappointing November production and retail data. Taiwan-based Hon Hai Precision Industry is exploring to acquire Sharp Corp. Tri-Stage expects annual net income to plunge 23.1%.

Stocks in Tokyo closed higher on Monday after five days of decline and bargain hunters returned.

Trading volume was thin as many world brokerages and stock exchanges remained closed after the Christmas holidays and in observance of Boxing Day.

Japanese industrial production in November slumped 1%, the first decline in three months and following a 1.4% increase in October, the Ministry of Economy, Trade and Industry said.

November retail sales fell 1.0% from a year ago and declined 2.5% compared to the previous month, indicating the first decline in four months.

On the positive side, the housing starts in November increased 1.7%, compared to 2.5% decline in October, the Ministry of Land, Infrastructure, Transport and Tourism reported.

Automobile production in November jumped 6% from the same month a year ago to 743,401 units, the Japan Automobile Manufacturers Association said.

Domestic automobile demand fell 6.6% to 388,817 units, while exports surged 12.7% to 414,870 units in November.

In November, motorcycle production plunged 11.9% to 46,453 units and export tumbled 23% to 33,080 units.

Separately, the Bank of Japan forecasted the 2020 Olympic Games to boost the economy with 30 trillion yen by 2020.

Gross domestic product is estimated to increase between 0.2% and 0.3% per year between 2014 and 2020 driven by construction, game preparation, and tourism activities.

The Nikkei 225 Stock Average jumped 104.29 or 0.6% to 18,873.35 and the broader Topix index increased 13 to 1,529.22.

The yen gained against the U.S. dollar to 120.47.

Stocks in Mumbai rebounded on the hopes that the coming year will reverse the declining trend as foreign investors step up buying.

The benchmark Sensex index has fallen just over 5% in the year so far and the index is trading at 15.5 times earnings. However, brokerage firms are holding out for higher market index in 2016 led by rallies in sugar, pharmaceuticals and software exporters.

Tata Motor led the gainers and generic pharmaceuticals makers rallied.

Rupee rose 3 paisa to ₹66.18 against one U.S. dollar.

The Sensex Index rose 195.42 or 0.8% to close at 26,034.13. The CNX increased 64.10 or 0.8% to 7,925.15.

India and Russia signed several energy development, diamond processing and defense systems related contracts.

The 15 large contracts totalling over $10 billion spread over ten years are expected to step up production of missiles, navy vessels, and aircraft components in India and the agreement between the two nations is expected to lead to the construction of ten nuclear power plants over the next two decades.

Tata Power, Essar, Reliance, Bharat Forge are some of the leading companies in India engaged in joint developments.