Utilities, consumer staples and real estate groups finish with gains
U.S. stocks registered a mixed finish on Thursday, 13 December 2018 after making small moves in and out of positive territory Thursday as investors continued to fret over the lack of clarity and progress in U.S.-China trade talks. On the domestic front, President Donald Trump again criticized the Federal Reserve's effort to normalize monetary policy. Concerns over slowing economic growth, and its adverse effect on corporate earnings, helped contribute to investors assuming some defensive positioning within the stock market.
The Dow Jones Industrial Average bucked the trend to finish with a gain 70.11 points, or 0.3%, 24,597.38, after rallying more than 200 points at the session high. The S&P 500 index edged down 0.53 point to end at 2,650.54 and the Nasdaq Composite Index shed 27.98 points, or 0.4%, to close at 7,070.33.
Utilities, consumer staples and real estate groups finished atop the sector standings on Thursday.
U.S.-China trade concerns remained at the fore of investors' minds amid signs that the Chinese were ready to make significant concessions to their industrial policy and reduce tariffs on imported autos. Trump also indicated that he would intervene in the arrest of Huawei's chief financial officer Meng Wanzhou if it would help ensure a trade deal with China.
On Thursday, reports that China has stopped requiring local governments to work toward its Made in China 2025 strategy, however, have added support to the thesis that China is willing to slow its push to strengthen its high-tech industry at the expense of foreign rival firms.
The U.S. dollar was up a bit Thursday as gold futures settled, with the ICE U.S. Dollar Index looking at a week-to-date rise of about 0.6%.
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Reviewing Thursday's economic data, which included Export and Import Prices for November, weekly Initial and Continuing Claims, and the Treasury Budget for November, Import prices declined 1.6% in November after increasing 0.5% in October. Export prices declined 0.9% in November after increasing an upwardly revised 0.5% (from 0.4%) in October. Excluding fuel, import prices were down 0.3%. Excluding agricultural products, export prices were down 1.0%. The key takeaway from the report is that it stirred some thinking that inflation trends could be in a topping phase, which is constructive in terms of the market's belief that the Federal Reserve is apt to take a more conservative path with future rate hikes.
Initial jobless claims for the week ending December 8 dropped by 27,000 to 206,000. Continuing claims for the week ending December 1 increased by 25,000 to 1.661 million. The key takeaway from the report is that it helped quell for the time being burgeoning concerns about the rising trend in initial jobless claims.
The Treasury Budget for November showed a deficit of $204.9 billion versus a deficit of $138.5 billion for the same period a year ago. The Treasury Budget data is not seasonally adjusted, so the November deficit cannot be compared to the $100.9 billion deficit for October. The fiscal year-to-date deficit is $305.4 billion versus a deficit of $201.8 billion for the same period a year ago. The budget deficit over the last 12 months is $882.6 billion.
Bullion prices ended mixed at Comex on Thursday, 13 December 2018. Gold futures ended lower on Thursday, with overall strength in the dollar helping the metal build on its losses for the week. Silver registered marginal gains.
Gold for February delivery lost $2.60, or 0.2%, to settle at $1,247.40 an ounce, giving back nearly all of the $2.80 gain it saw a day earlier. Week to date, it has lost 0.4%. March silver settled at $14.855 an ounce, up just under half a cent for the session.
Crude oil futures moved sharply higher late in Thursday's trading session, on 13 December 2018 sending the U.S. benchmark up by nearly 3%, after a news report said that Saudi Arabia plans to cut shipments to U.S. refiners to avoid an expansion of U.S. stockpiles. Oil prices had already been moving up as traders pored over data showing a rise in monthly OPEC output, as well as a recent report of a weekly decline in U.S. crude supplies and production. Price gains intensified after a report said Saudi Aramco warned U.S. refiners to brace for a steep drop in cargoes next month, citing people briefed on the plans of the state-controlled oil company.
Against this backdrop, West Texas Intermediate crude for January delivery rose $1.43, or 2.8%, to settle at $52.58 a barrel on the New York Mercantile Exchange. Global benchmark February Brent crude added $1.30, or 2.2%, to end at $61.45 a barrel on ICE Futures Europe.
Meanwhile, in its closely watched monthly oil market report, the International Energy Agency said crude output by OPEC rose by 100,000 barrels a day on month to reach 33.03 million barrels a day in November. Saudi Arabia churned out 410,000 barrels a day to a historic high of 11.06 million barrels a day.
Looking ahead, investors will receive Retail Sales for November, Industrial Production and Capacity Utilization for November, and Business Inventories for October on Friday.
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