US markets rally despite soft data

US stock markets ended higher for the second session on Tuesday as investors shrugged off soft economic data. The dollar weakened as traders booked profits after Fed’s interest rate increase last week. According to live dollar index data the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.2% to 98.215. The S&P 500 added 0.9% as all 10 major sectors closed in positive territory, led by consumer staples, energy and industrial stocks. The Dow Jones Industrial Average rallied 1% to 17417.27 led by 4.9% gain in Caterpillar. The Nasdaq Composite Index closed 0.7% higher at 5,001.11. In economic news, the GDP third quarter annual growth rate was revised downward to 2% from a previous estimate of 2.1%, supported by strong consumer and business spending while inventory investment fell. Existing home sales posted a 10.5% decline in November, the sharpest drop in five years. Analysts point to a 6.3% rise in median home price from the same month in 2014, lenders’ caution about using new simplified paperwork for home-buying and shrinking inventories as possible factors constraining home purchases. Trading was light on US exchanges during a holiday-shortened week. US markets will close early on Christmas Eve with New York Stock Exchange and the Nasdaq Stock Market closing at 19:00 CET on Thursday. Today at 13:00 CET Mortgage Applications will be released in US. At 14:30 CET November Durable Goods Orders, Personal Income and Personal Consumption Expenditure will be published. At 16:00 CET November New Home Sales and University of Michigan final Consumer December Confidence Index for December will be released. The tentative outlook is positive.
European stock markets ended mixed on Tuesday. The Stoxx Europe 600 index lost 0.1%. Rising oil prices helped UK’s FTSE 100 close up 0.8%, while Germany’s DAX 30 ended 0.1% lower at 10,488.75, and France’s CAC 40 added less than 0.1%. The euro edged higher against the dollar, trading at $1.0974 compared with $1.0925 late Monday in New York. Oil stocks advanced with BG Group rallying 3.3%, Portugal’s Galp Energia rising 2.1% and Italy’s ENI adding 1.1%. Trading was light. Tomorrow the UK and French markets will close early at 13:30 CET and 14:00 CET respectively, while German market will be closed all day. Today the final reading of third quarter French GDP came in lower than expected. At 10:30 CET final reading of UK third quarter GDP will be published. The tentative outlook is neutral.
Asian stocks advanced today following the gains on Wall Street. Australia's main index rose 0.5%, the Hang Seng index rallied 0.93% while Shanghai Composite Index lost 0.4%. The low liquidity was drained further as Japanese markets were closed for the Emperor's Birthday holiday.
Oil prices are extending gains today after US WTI rebounded on Tuesday, settling at a premium to Brent crude oil for the first time since August 2010. Futures for February delivery of WTI crude, the US benchmark, rose 0.9%, to $36.14 a barrel while futures on Brent crude fell 0.7% to $36.11 a barrel on London’s ICE exchange. Among the factors which contributed to WTI’s outperformance analysts mention the lifting of a four-decade ban on US oil exports, unwinding of a long Brent/short WTI spread before the end of the year, an increase in North Sea Brent crude output and an unexpected 3.6 million barrels fall in US crude stocks as reported by industry group the American Petroleum Institute. US stock official report will be released today at 16:30 CET by Energy Information Administration.