S&P 500 and Nasdaq Hit New 52-week Intraday Highs, Crude Oil Plunged 4%

Barry Adams
12 Dec, 2023
New York City

Stocks gained after bulls and bears found something to talk about in the latest inflation report.

The S&P 500 index and the Nasdaq Composite extended their gains for the fourth day in a row and for the last six consecutive weeks.

Both indexes reached new 52-week intraday highs after the latest inflation report met investors expectations, but core inflation stayed significantly above the Fed's target level.

The Federal Reserve is also set to announce its rate decision Wednesday at the end of its two-day policy meeting.

Investors widely anticipate the central bank holding the fed funds rate range between 5.25% and 5.50% for the third time in a row.

Market indexes have soared and stretched this year's gains in the hopes that the robust labor market conditions are likely to help the Federal Reserve navigate the economy to slower growth near 2% and avoid a recession while simultaneously cooling inflation to its target range of 2%.

 

U.S. Consumer Price Inflation Slowed to 3.1% 

The consumer price index in November rose 0.1% from the previous month and increased 3.1% from a year ago, the Bureau of Labor Statistics reported Tuesday.

Core inflation, which excludes food and energy, rose 0.3% in November after rising 0.2% in October.

On an annual basis, core inflation rose 4.0%, matching the expectations set by a group of five economists surveyed by Ticker.com.

Energy prices declined 5.4%, reflecting lower prices for gasoline, while food prices rose 2.9% and shelter costs soared 6.4% from a year ago.

 

U.S. Indexes and Yields

The S&P 500 index gained 0.3% to 4,633.45, and the Nasdaq Composite increased 0.4% to 14,495.94.

The yield on 2-year Treasury notes decreased to 4.69%, 10-year Treasury notes inched lower to 4.18%, and 30-year Treasury bonds increased to 4.28%.

Crude oil prices dropped 4% and extended the decline of the previous seven consecutive weeks after the latest inflation report raised the prospect of weakening demand.

Oil prices have been under pressure following the surging production in the U.S., Canada, and Brazil, and new supplies from Guyana are also adding to the global markets.

Crude oil decreased $2.95 to $68.35 a barrel, and natural gas prices fell 12 cent to $2.30 a thermal unit.

Gold increased $6.64 to $1,988.15 an ounce ahead of the release of the inflation report today and the Fed's rate decision on Wednesday.  

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged higher to 103.87.

 

U.S. Stock Movers

Lucid Group decreased 2.8% to $4.48 after the company said chief financial officer Sherry House is resigning, effective immediately, to pursue other opportunities.

Ms. House will be available in an advisory role through the end of the year to assist in the transition of her duties.

Hasbro declined 5.3% to $46.30 after the toymaker announced its plan to lay off 1,100 workers, according to a memo cited by CNBC.

"The toymaker is grappling with soft sales that have continued into the holiday season and are “likely to persist into 2024,” chief executive Chris Cocks said in the memo to internal staff.

Alphabet Inc. decreased 0.7% to $132.33 after a federal jury in California ruled against the company's Google Android App Store filed by Fortnite video game maker Epic Games.

In a unanimous verdict, the jury said that the company's Android app Store has violated antitrust laws and secured billions of dollars in profit by forcing Play Store customers to use its high-priced payment processing.

Google said it plans to challenge the jury verdict, and the company will appeal the decision.

Oracle Corp. declined 8.9% to $104.91 after the database giant reported weaker-than-expected revenue in the fiscal second quarter.

The company reported weaker-than-estimated revenue in the cloud segment and database license support.

 

European Markets Traded Around Flatline 

The European markets traded higher, and investors awaited rate decisions from the European Central Bank and other central banks this week.

Benchmark indexes in Germany and France advanced and traded near recent highs, but the market indexes in London edged lower on the persistent weakness in commodity prices.

Economic news dominated market sentiment, and investors reviewed the latest decline in the German wholesale price index and the slower wage growth in the UK.

 

German Wholesale Prices Decline Extended to 8th Month

Germany's wholesale prices declined 3.6% in November following the falls of 4.2% in October and 4.1% in September, the Federal Statistics Office, or Desatis, reported Tuesday.

Wholesale inflation declined for the eighth month in a row, reflecting higher prices in the previous year because of the war in Ukraine.

Wholesale prices fell 0.2% from the previous month, but at a slower pace than the 0.7% decline in October.

Petroleum product prices decreased by 13.9%; grain, seed, and tobacco prices by 24.3%; chemical products by 20.9%; and metals and semi-finished metal products by 12.8%.

On the other hand, wholesale prices for fruits and vegetables jumped 14.8%, sugar, confectionary, and bakery products increased 10.1%, and beverage prices increased 7.4%.

 

UK Wage Growth Slowed, Jobless Rate Held Steady at 4.2%

Weekly regular wages in the UK increased less than expected in the three months to October, the Office for National Statistics reported Tuesday.

Regular weekly wages, excluding bonuses, increased 7.3% to £620 in the period, slower than the upwardly revised 7.8% in the previous period ending in September.

The average wage, including bonuses, increased 7.2% from a year ago, slower than the revised 8.0% increase in the previous period.

The regular wage rose at a slower pace for the second time in a row and advanced at the slowest pace in six months.

Wage growth in the private sector slowed to 7.3% from 7.9%, and wages in the public sector rose 6.9% compared to 7.4% in the previous period.

Real wages, after adjusting for inflation, rose 1.4%.

The unemployment rate held steady from the previous period at 4.2% in the three months to October.

Job vacancies declined for the 17th period in a row, and vacancies fell for the longest period on record but were still higher than pre-pandemic levels, the ONS said in the report.

Job vacancies decreased by 45,000 to 949,000 in the quarter ending in November from the previous quarter ending in August.

The estimated number of jobs in the workforce expanded to a record 36.8 million in September, an increase of 210,000 from June.

 

Europe Indexes and Yield

The DAX index decreased 0.02% to 16,791.74, the CAC-40 index fell 0.2% to 7,543.11, and the FTSE 100 index fell 0.03% to 7,542.77.

The yield on 10-year German bonds increased to 2.29%; French bonds traded higher to 2.78%; the UK gilts rose to 3.98%; and Italian bonds inched higher to 4.01%.

The euro traded lower to $1.079, the British pound inched lower to $1.256, and the U.S. dollar eased to 87.66 Swiss cents.

Brent crude decreased $3.04 to $72.98 a barrel, and the Dutch TTF natural gas declined by €1.42 to €34.70 per MWh.

 

Europe Stock Movers

Rate-sensitive stocks were in focus ahead of the interest rate decision and policy announcement from the European Central Bank on Thursday.

BNP Paribas, Societe Generale, Deutsche Bank, Commerzbank, and UniCredit declined between 0.1% and 1.5%.

Allianz, Swiss Re, Generali, Aegon, and Mapfre declined between 0.2% and 1.5%.

Nokia Oyj rose 1.3% to €2.98 after the telecom equipment maker lowered its profitability goal after the company lost a multi-year contract with the U.S.-based AT&T.