2023-12-01 22:16:17
US stocks begin the last months of the year with strong increases… and the S&P index is at its highest levels in 2023
US stock indices continued to rise on the first day of the new month, with the S&P 500 index recording its highest closing level in 2023, and the Dow Jones Industrial Average continuing to record new high levels that we have not seen this year, despite the Federal Reserve Chairman’s assurances that raising US interest rates It’s still on the table.
At the end of trading on the last day of the week, the S&P 500 index was up by 0.59%, and the Dow Jones Industrial Average added 0.82% to its value at the beginning of today’s trading, while the Nasdaq index rose by 0.55%. A month before the year ended, the Dow Jones Industrial Average’s gains in 2023 reached 9.4%.
Federal Reserve Chairman Jerome Powell on Friday opposed market expectations for a cut in interest rates next year, noting that “it is too early to conclude with confidence that monetary policy has become sufficiently restrictive.”
Despite a recent series of positive indicators regarding inflation, the central bank head said the FOMC plans to “retain policy tight” until policymakers are convinced that inflation is heading firmly toward its target level, estimated at two percent.
Powell said in prepared remarks to his audience at Spelman College in Atlanta that “it is too early to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when the policy will be eased,” indicating that they at the Federal Reserve are prepared to tighten policy further if It was necessary.
In Europe, stocks extended their gains today, Friday, following a strong performance in November, driven by sharp increases in the mining sector, and coinciding with the continued decline in euro zone bond yields, due to increasing expectations of lowering interest rates.
The STOXX 600 index of European stocks closed up 1% to its highest levels since August, following recording monthly gains of 6.4% in November.
The index achieved an increase for the third week in a row, supported by gains in the real estate sector, which is highly affected by interest rates.
Euro zone bond yields extended their decline following the release of weak manufacturing data in the United States, and comments from Federal Reserve Chairman Jerome Powell, supporting hopes that lowering interest rates may occur in the first quarter of next year.
Goldman Sachs expects the European Central Bank to make its first interest rate cut in the second quarter of 2024, compared to a previous expectation that the first cut will occur in the third quarter of next year.
The mining sector topped sector gains on Friday, rising by 4.2%, tracking the impact of rising metal prices thanks to the decline in the dollar and supportive data from China, a major consumer.
Signify Lighting shares rose 4.9%, with the world’s largest lighting manufacturer announcing a new organizational structure to reduce costs.
While the shares of the Swedish video streaming service company Viplay fell 74.4%, to a record low, due to plans to restructure its debts.
Also in the last trading days of the week, one day following OPEC+ announced its intention to reduce its production, oil prices declined, as doubts increased regarding the extent to which the coalition member states might adhere to their quotas of the reduction.
Brent crude futures fell, losing $1.98, or 2.45%, reaching $78.88 per barrel, and US crude futures also fell, falling $1.89, or 2.49%, and recording $74.07 per barrel, upon settlement.
Yesterday, Thursday, members of the Organization of Petroleum Exporting Countries and their allies (OPEC+) agreed to make additional cuts in oil supplies by one million barrels per day, coinciding with the Kingdom of Saudi Arabia extending its voluntary reduction of the same size.
Markets have once once more turned towards higher oil prices in the new year, as other producers pledged to reduce production.
The cartel on Thursday issued a statement that did not officially endorse the production cuts, but individual countries announced voluntary cuts totaling 2.2 million barrels per day for the first quarter of 2024, according to Archyde.com.
The reductions are led by the Kingdom of Saudi Arabia, the largest oil producer in the group, as it has reduced its production by regarding one million barrels per day since the beginning of the second half of the year.
Russia also said that it would reduce supplies by 300,000 barrels per day of crude oil and 200,000 barrels per day of other petroleum products during the first quarter of next year.
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