U.S. and Global Markets Extend Gains In Monday's Trading Amid Positive Sentiment

Alexander Garcia
23 Dec, 2024
Miami

Wall Street indexes advanced on Monday in a holiday-shortened week amid fading hopes a rally as the new year approached.   

The S&P 500 index advanced 0.5%, and the Nasdaq Composite gained 0.8% in early trading. 

The New York Stock Exchange closes early on Tuesday at 1 p.m. ET, and markets resume trading on Thursday, and financial markets are closed on Wednesday to celebrate Christmas Day. 

Last week, the S&P 500 index and the Nasdaq Composite declined 2% after the Federal Reserve delivered the third consecutive rate cut of 0.25% and signaled a more cautious approach in 2025. 

However, economic indicators supported a strong economic backdrop after retail sales advanced, housing activities showed increasing momentum, and GDP growth in the third quarter was revised higher to 3.1%. 

But the Fed's signaling of slower rate reductions pressured market indexes around the world, as investors reviewed monetary policy decisions from eight central banks. 

Central bankers in the UK, Norway, and Japan worried about resurgent inflation and suggested a more cautious and gradual approach in future rate actions. 

 

November U.S. Durable Goods Orders Declined 

New orders for manufactured durable goods in November, down three of the last four months, declined from the previous month, led by the weakness in transportation orders. 

New orders decreased $3.0 billion, or 1.1%, from the previous month or fell 1.3% from a year ago to $285.1 billion, the U.S. Census Bureau announced today. 

This followed a 0.8% October increase. 

Excluding transportation, new orders eased 0.1%; excluding defense, new orders fell 0.3%. 

Transportation equipment orders, also down three of the last four months, drove the decline with a fall of $2.9 billion, or 2.9%, to $95.5 billion.

However, closely watched proxy for business spending, non-defense capital goods excluding aircraft advanced 0.7%, the fastest increase since August 2023, and reversing the fall of 0.1% in October. 

 

U.S. New Home Sales Advanced In November 

New single-family home sales in November were at a seasonally adjusted annual rate of 664,000, an increase of 5.9% from October, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. 

New home sales rose from the revised October rate of 627,000 and jumped 8.7% from a year-ago rate of 611,000.

The median sales price of new homes sold in November was $402,600, and the average sales price was $484,800.

New home sales in the Midwest advanced 10% from a year ago to 88,000; in the South, they rose 13.6% to 419,000; fell 1.4% to 136,000; and dropped 11.5% to 23,000. 

 

U.S. Indexes and Treasury Yields

The S&P 500 index increased 0.5% to 5,951.39, the Nasdaq Composite rose 0.7% to 19,705.34, and the Russell 2000 index fell by 0.4% to 2,233.39. 

The yield on 2-year Treasury notes edged higher to 4.33%, 10-year Treasury notes inched up to 4.56%, and 30-year Treasury bonds increased to 4.75%.

WTI crude oil decreased $0.34 to $69.11 a barrel, and natural gas prices edged down 6 cents to $3.68 a thermal unit.

Gold decreased by $9.86 to $2,612.64 an ounce, and silver rose by $0.12 to $29.62. 

The dollar index, which weighs the US currency against a basket of foreign currencies, edged higher by 0.41 to 108.12.

 

U.S. Stock Movers 

Xerox Holdings Corp. advanced 8.7% to $9.12 after the company announced the purchase of printer maker Lexmark for $1.5 billion. 

The purchase of Lexmark is expected to close in the second half of 2025. 

Xerox said it will finance the purchase in part by trimming its annual dividend payout in half to 50 cents from the current $1.0. 

The company plans to start the dividend cut from the first quarter. 

Honda Motor Co. Ltd. jumped 13.8% to $27.22, and Nissan Motor Co. Ld. declined 2.1% to $5.56 after the two companies announced in a joint conference about their merger plan. 

The deal is likely to be completed in the second half of 2025, and after the merger, the combined company is expected to be the third largest in the world with total vehicle sales of over 7.6 million. 

 

European Markets Hold Annual Gains Ahead of Holiday Break 

Stocks on European stock exchanges lacked direction in light trading as holiday mood gripped investor sentiment. 

Benchmark indexes in Paris, Frankfurt, Milan, and London traded around the flatline amid a subdued economic outlook and growing political turmoil in Germany and France. 

France delayed the announcement of the new government till late evening on Monday as the country observes the national day of mourning for the victims of the cyclone in the Indian Ocean island of Mayotte. 

French officials confirmed a death toll of 34, but sources in the Indian Ocean island estimate more than 2,000 are likely missing or dead, as many undocumented workers live on the island. 

In a holiday-shortened week, stocks are likely to meander in thin trading as investors look forward to wrapping up the current year with gains. 

For the year so far, as of the close of Friday, the DAX 30 index advanced 18.6%, the FTSE 100 index gained 4.7%, the FTSE MIB, or Milano Indice di Borsa, jumped 11.2%, but the CAC-40 index decreased 3.4%. 

Investors are hoping that the European Central Bank will lower interest rates by at least three times in the approaching year, after ECB President Christine Lagarde commented that the central bank is "very close" to achieving its medium-term inflation target. 

On the economic front, real GDP in the UK stalled in the third quarter, revised down from the first estimate increase of 0.1%, the Office of National Statistics reported Monday.

The services sector growth stalled, and the production sector edged lower; however, the construction sector advanced. 

 

Europe Indexes and Yields

The DAX index decreased by 0.2% to 19,848.77; the CAC-40 index fell by 0.03% to 7,272.32; and the FTSE 100 index inched higher by 0.2% to 8,102.72.

The yield on 10-year German bonds edged lower to 2.29%, French bonds advanced to 3.46%, the UK gilts decreased to 4.53%, and Italian bonds declined to 3.46%.

The euro edged lower to $1.039; the British pound inched up to $1.237; and the U.S. dollar eased to 89.54 Swiss cents.

Brent crude decreased $0.54 to $72.40 a barrel, and the Dutch TTF natural gas rose by €1.93 to €45.68 per MWh. 

 

Europe Stock Movers

Direct Line Insurance Group PLC advanced 3.1% to 250.80 pence, and Aviva PLC edged higher by 0.4% to 458.90, and the Direct Line's board accepted the £3.7 billion merger proposal from Aviva. 

Chesnara Plc declined 0.8% to 256.0 pence after the pension and life insurance company announced the acquisition of Canada Life UK business. 

Swisscom AG increased 0.3% to CHF 500.0 after the company's acquisition of Vodafone Italia was approved by the antitrust regulator and industry ministry of Italy. 

Renault SA decreased 0.3% to €46.67 after Japan's Honda Motor and Nissan confirmed official talks to merge their operations and create the third largest automaker in the world with sales of more than 7.5 million vehicles. 

Renault lowered its stake in Nissan to 15% in 2023 from 43% in 2002, matching the non-voting holding stake of Nissan Motor in the French automaker. 

Knorr-Bremse AG declined 1.6% to €67.95, and the German brake-system manufacturer sold its U.S. subsidiary Sheppard to Balmoral RHS Acquisition Corp as the company renews its focus on domestic core operation. 

Novo Nordisk AS jumped 8.5% to DKK 639.40 after the pharmaceutical company announced disappointing trial results of its weight loss drug CagriSema on Friday. 

Novo Nordisk stock plunged 20% in Friday's session and recovered some of the losses in Monday's trading. 

 

China and Hong Kong Indexes Advanced at the Start of Holiday-shortened Week 

Stock market indexes in China and Hong Kong advanced in light trading as investors reassess economic growth outlook in the approaching year.

The Hang Seng index increased 0.8%, and the CSI 300 index gained 0.2% amid geopolitical tensions and growing economic uncertainties. 

In the year so far, to last Friday, the Hang Seng index has advanced about 18%, and the mainland CSI 300 index gained about 16%, driven by promises of fiscal stimulus to revive consumer confidence and the flailing property market. 

Market indexes have trimmed about 7 percentage points from the peak in late September after policymakers failed to follow through with detailed implementation plans.

China's property crisis extends to the fifth, and leading developers are still struggling to repay interest and loans amid falling sales and weak prices. 

Despite the coordinated efforts by the People's Bank of China, central policymakers, and local governments, property prices and transactions continue to fall outside of top-tier cities, pushing major developers closer to financial default.  

Moreover, there are no signals of the easing of debt stress, as property developers' bonds are still trading near their all-time lows at the distressed levels, and most property developers are teetering on default. 

Investors are staying on the sidelines amid U.S. policy uncertainties and rising trade tensions with the U.S. and the European Union. 

Stock markets are closed on Wednesday and Thursday and will operate only half a day on Tuesday to observe Christmas Holiday. 

 

China Stock Movers 

The Hang Seng index increased 0.8% to 19,881.79, and the mainland-focused CSI 300 index advanced 0.2% to 3,933.57.

Semiconductor-related stocks were in focus amid elevated trade tensions with the U.S. 

SMIC gained 2.9% to HK $29.10, GigaDevice Semiconductor declined 5.3% to ¥107.25, and JCET Group fell 2.3% to ¥39.03. 

Li Auto Inc. gained 0.5% to $93.75, BYD added 1.3% to HK $270.40, and Geely decreased 1.7% to HK $15.06. 

Tencent Holdings fell 1.4% to HK $420.60, Alibaba Group Holding added 1.1% to HK $81.0, and Meituan inched down 1.9% to $155.60.