- Dow Average Tops 19,000 for the First Time
The Dow Jones Industrial Average climbed above 19,000 for the first time, as U.S. stocks added to gains that pushed four major equity benchmarks to simultaneous records for the first time since 1999.
The Dow average rose 45.44 points to 19,002.13 at 9:31 a.m. in New York, pushing its advance since Nov. 8 to 3.6 percent. The S&P 500 Index rose 0.2 percent to 2,202.23. Energy and commodity producers led the rally in equities on Monday, adding to a post-election advance spurred by speculation the new government’s economic policies will boost growth.
The new milestone for the S&P 500 pushed the index to an annual gain of 7.6 percent, a recovery for a gauge that started the year down as much as 11 percent. Donald Trump’s presidential win has fueled optimism that his pledge to cut taxes and increase fiscal spending will benefit industries more geared to the economic cycle. The fresh equity records also came as American companies ended a five-quarter profit slump.
“The market is a lot more sure of itself now,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. He predicts the S&P 500 will rise another 9.2 percent by the end of 2017. “Stocks are no longer stuck in that frustrating range and we’ve finally broken through to new records. We can move on to pricing in the improving outlook: there are strong signs that the U.S. economy is in good shape and that bodes well for corporate earnings.”
Traders have also boosted bets for tighter monetary policy since the vote, on speculation Trump’s policies will lead to higher inflation. After Federal Reserve Chair Janet Yellen acknowledged last week the strength in the economy, saying that the central bank is close to raising rates, traders are now pricing in a 100 percent chance of a move in December.
Data at 10 a.m. in Washington will probably show sales of previously owned U.S. homes eased in October while remaining close to a nine-year high, according to economists’ forecasts compiled by Bloomberg. Reports on new home sales, durable goods and manufacturing are due Wednesday, as well as minutes from this month’s Fed meeting. U.S. markets will be closed on Thursday for the Thanksgiving holiday.
Among shares moving in New York trading, Signet Jewelers Ltd. jumped after raising its annual earnings forecast. Dollar Tree Inc. rallied as it reported sales that beat projections. Whiting Petroleum Corp. rose after selling pipelines and natural-gas processing facilities in North Dakota to Tesoro Corp. for $700 million. Palo Alto Networks Inc. slumped after its revenue and profit forecasts for the current quarter missed analysts’ estimates.
Brent Crude Oil Approaches $70 Per Barrel on Friday
Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension
Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.
Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.
Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.
While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.
According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.
“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”
Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.
“The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.
“I do believe we’re headed for a much healthier supply and demand environment” she said.
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Oil Jumps to $67.70 as OPEC+ Extends Production Cuts
Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.
OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.
Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”
Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.
Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.
Experts have started predicting $75 a barrel by April.
“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”
Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin
Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges
Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.
The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.
The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.
“We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.
Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.
Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.
In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.
The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.
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