2023-12-18 23:44:15
US stocks are rising… and the S&P index is approaching its highest levels ever
Most US stocks continued to rise on Monday, supported by the announcement of a group of important acquisition and merger deals, the value of which exceeded $40 billion, and largely ignoring the mitigating messages from Federal Reserve officials, which aimed to prevent investors from anticipating the expected interest rate cut.
Following a strong seven-week rally, the S&P 500 rose 0.45%, the Nasdaq rose 0.61%, and the Dow Jones Industrial Average ended the day at roughly the same point it began.
With Monday’s rise, the S&P 500 is only 1.2% away from surpassing its all-time high, which it reached early last year.
US stocks break record levels
By the end of last week’s trading, the index achieved the longest series of weekly gains since 2017. The benchmark index for the American market rose by 3.8% during the current month, which is the same percentage by which the Dow Jones Industrial Average rose, while increases in the Nasdaq index reached 4.8%.
The Dow Jones Index also recorded a record high during trading on Friday, while the Nasdaq 100 index recorded the highest closing level in its history on Monday.
US Steel shares rose 26% following Japan’s Nippon Steel said it would buy the company, which was at one time the largest American company, in a deal worth $14.9 billion.
The recent rises were supported by signals released by the Federal Reserve, which showed that its members expected three interest rate cuts in 2024, coinciding with a decline in inflation in the largest economy in the world. Meanwhile, 10-year Treasury bond yields fell below 4%, following being above 5% last October.
In Europe, stocks on Monday gave up strong gains they had achieved in recent weeks, affected by a decline in auto sector stocks and a decline in the intensity of statements from European Central Bank officials regarding early cuts in interest rates next year.
The Stoxx 600 index of European stocks fell by 0.3%, following recording its first series of gains in five weeks since April on Friday.
A number of policymakers at the European Central Bank did not support market expectations that the bank would cut interest rates by next March, which increased pressure on stocks and raised European bond yields.
Slovak Central Bank President Peter Casimir said that any talk regarding the European Central Bank reducing interest rates is still premature.
ECB Governing Council member Bostyan Vasly said the bank would wait until at least the spring before it might reassess its policy outlook.
The German DAX index fell 0.6% from the record levels it recorded last week, following a survey showed that German business confidence unexpectedly declined in December.
Automakers were a major reason for the decline in the main index on Monday, following Mercedes-Benz and BMW shares fell by more than 1%, following the German government’s decision to end work on a program that supports buyers of new electric cars.
Energy stocks rose 1.1%, coinciding with oil prices rising more than 1% today, Monday, as a result of increasing attacks by the Yemeni Houthi group on ships in the Red Sea, although the abundance of supplies and doubts regarding Russia’s plan to reduce exports in December limited gains. .
Brent crude futures rose $1.40, or 1.83%, reaching $77.95 per barrel, and US crude futures rose $1.04, or 1.46%, reaching $72.47 per barrel, upon settlement.
British Petroleum (BP), the leading oil company, said on Monday that it would temporarily suspend all transportation operations through the Red Sea following the attacks launched by the Houthi group, which controls most of Yemen, at the weekend.
The company added in a statement, according to Archyde.com, “The safety and security of our employees and those who work on our behalf is a priority for BP.”
Archyde.com quoted Alexander Novak, the former Russian Energy Minister, as saying that Russia will increase oil export cuts within the framework of the OPEC+ agreement in December, bringing the number to exceed 300,000 barrels per day, by next May.
In a related context, the National Oil Corporation of Libya announced that it was able to control a fire that broke out in the oil transportation lines of the Harouge Oil Operations Company.
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