Stocks closed out the week in a strong fashion Friday as the Dow, S&P 500 and Nasdaq all jumped to new all-time highs in the market’s push further into record territory.
The Dow Jones industrial average rose 96.97, or 0.5%, to close at a record 20,269.37, according to preliminary calculations. The Standard & Poor’s 500 index gained 8.23 points, or 0.4%, to 2316.10 and the Nasdaq composite index added 18.95, or 0.3%, 5734.13. Both the S&P and Nasdaq were up for a fourth straight day.
Miners and other raw materials companies led the market rally and rising crude oil prices also gave energy companies a big boost. Investors kept their focus on strong company earnings and corporate deal news.
Investors have focused on companies quarterly results lately as they size up corporate America’s growth prospects. Earnings are on track to mark the second-consecutive quarter of growth after a losing streak of five straight quarters. Beyond earnings, investors are also eying Washington D.C. for signs the Trump administration will deliver on the promised business-friendly policy proposals that helped drive a market rally last fall, including slashing government regulations and taxes.
Benchmark U.S. crude was up 91 cents, or 1.7%, at $53.91 a barrel in New York. The contract rose 66 cents on Thursday. Brent crude, the benchmark for international oil prices, was up $1.05, or 1.9%, at $56.68 a barrel in London.
Stocks were in rally mode Thursday as all three of the major indexes jumped to new all-time closing highs.
The Dow Jones industrial average jumped 118 points, or 0.6%, to 20,172.40.
Up by the same percentage were the S&P 500 and the Nasdaq composite — to their new highs of 2307.87 and 5715.18, respectively.
Investors weighed earnings from a batch of companies, including Twitter, Kellogg and Viacom. Energy stocks led the gainers as the price of crude oil headed higher. Utilities were down the most.
Benchmark U.S. crude gained 66 cents, or 1.3%, to $53.00 a barrel in electronic trading on the New York Mercantile Exchange, while Brent crude, the benchmark for international oil prices, added 40 cents to $55.52 a barrel.
Stock indexes wavered between small gains and losses before ending mixed Thursday as investors sized up the latest company earnings news. Consumer goods and industrial stocks climbed the most, while health care and utilities were among the biggest laggards.
The Dow Jones industrial average climbed further above the 20,000 level it passed Wednesday. gaining 32 points, or 0.2% to 20,100.91.
Wall Street came off solid gains from the day before. The Dow Jones industrial average, after topping the magic 20K milestone and staying there, hit a record closing high along with the Nasdaq composite and the S&P 500.
On Thursday the Nasdaq slipped fractionally, losing just 0.02% to 5655.18. Off a little less than 0.1% was the S&P 500, now at 2296.68.
It’s been a record-making week on Wall Street. The S&P 500 index and Nasdaq composite closed at all-time highs on Tuesday and Wednesday. The Dow, which tracks 30 major industrial companies, added its own milestone Wednesday after it breached the 20,000 mark for the first time.
The market is getting a general boost from strong company earnings and investor optimism that the Trump administration’s policies on taxes, regulation and trade will be good for business.
Oil prices jumped as benchmark U.S. crude oil was up $1.07, or 2%, at $53.82 per barrel in New York. Brent crude, used to price international oils, was up $1.08, or 1.9%, at $56.50 a barrel in London.
Saudi Arabia’s oil minister said that the supply cuts agreed by Opec and non-Opec countries at the end of last year may not need to be extended beyond June, as rising demand and strong compliance should have pushed the market towards balance by then.
Khalid al Falih, speaking at an industry event in Abu Dhabi, struck a bullish pose saying the cuts, which began on January 1, would have their “full impact by the first half” of 2017.
“We don’t think it’s necessary given the level of compliance…and given the expectations of demand,” Reuters reported.
“Based on my judgement today it’s unlikely that we will need to continue (the agreement) – demand will pick up in the summer and we want to make sure that the market is supplied well. We don’t want to create a shortage or squeeze.”
He added, however, that the group could still extend the six-month deal “if there was a need”.
Brent crude, the international oil benchmark, was up 38 cents at $55.83 a barrel by 10am London time while US benchmark West Texas Intermediate gained 32 cents to $52.69 a barrel.
Opec still does not expect the oil market to move back into balance until the second half of next year, despite agreeing a global supply pact with Russia and other countries to cut output.
In its monthly outlook, the 13-member cartel pegged demand for its crude at 32.6m b/d next year – just 100,000 b/d above the group’s new output target of 32.5m b/d – and said the further supply cuts agreed with non-Opec members would contribute to mopping up excess supplies, but only slowly
“Combined with the joint cooperation with a number of non-Opec countries in adjusting production by around 600,000 b/d [this] will accelerate the reduction of global inventories and bring forward the rebalancing of the oil market to the second half of 2017,” Opec said.
The cartel’s view of the market is more conservative than some other forecasters. On Tuesday the International Energy Agency said it now expects the oil market to start moving into balance in the first half of next year.
The price of Brent Crude, the international oil benchmark, has risen above $57 for the first time since July 2015 after Opec won the support of countries outside its cartel for its planned supply cuts.
Russia, alongside 10 other countries including Mexico, Oman and Azerbaijan agreed to reduce their production by 558,000 barrels a day on Saturday.
The agreement, coming on top of Opec’s earlier promise to curb output by more than 1m barrels a day, has helped Brent to climb a further 5 per cent on Monday morning, to $57.06 per barrel.
The international benchmark has now rallied more than 22 per cent in the last three weeks.
WTI, the US benchmark, is also up 5.2 per cent this morning to $54.21 per barrel, its highest level since October 2015.
After a day of frenetic OPEC headlines being all that matters, oil traders may briefly focus on fundamentals as API reports an unexpectedly large build in gasoline inventories ( +2.68mm vs 900k exp). Overall crude, cushing, and distillates saw inventory draws which left wti slightly lower post-data.
Crude -1.28mm (+1mm exp)
Cushing -140k (-100k exp)
Gasoline +2.68mm (+900k exp)
After last week’s across the complex builds, it was ony gasoline that saw a build this week (which fits seasonally)
A rollercoaster day in WTI thanks to OPEC headlines
Rather notably, as Bloomberg points out, the prompt WTI M1-M2 spread widened to -90c today, the biggest discount since April. “There’s plenty of supply around,” Zahir say, adding that a deepening contango encouraging more oil to go into storage.
U.S. stocks jumped Monday as all four major U.S. indexes closed at new record highs.
Stocks got a lift from energy stocks as the price of oil jumped. Investors are hoping that OPEC countries will soon finalize a deal that would cut oil production and help support prices. The start of the week once again brought several corporate deals, with companies in the energy and technology industry making moves.
The Standard & Poor’s 500 index rose 16.28, or 0.8%, to close at a record 2198.18. The Dow Jones industrial average gained 88.76, or 0.5%, to a record close of 18,956.69. The Nasdaq composite index gained 47.35, or 0.9%, to close at an all-time high of 5368.86. The Russell 2000, an index of smaller companies, rose 6.59, or 0.5%, to 1322.23.
For the past couple of weeks, the main driver in markets has been the election of Donald Trump as the next U.S. president and bullishness about possible pro-growth fiscal policies. In general, his victory has helped stocks and the dollar but weighed on bonds. But slowly attention is shifting onto other matters, including next month’s widely anticipated interest rate hike from the Federal Reserve.
Also generating attention is the next meeting of oil ministers from the OPEC oil cartel on Nov. 30 in Vienna, Austria. Expectations are growing that the ministers will push through a production cut following an indication recently that one was on the cards. That’s helped buoy oil prices in markets.
Benchmark U.S. crude oil rose to its highest price this month. It gained $1.80, or 3.9%, to $47.49 a barrel while Brent crude, the international standard, rose $2.04, or 4.4%, to $48.90 a barrel in London.
Having closed below $50 for the first time in 3 weeks, WTI Crude extended its losses to 3 week lows after API reported crude inventories rose by a bigger than expected 4.8mm barrels (more than double the 2mm expectation).
Crude +4.8mm (+2mm exp)
Cushing -2.3mm (-500k exp)
Gasoline +1.7mm (-1mm exp)
Crude inventories have drawn down for 6 of the last 7 weeks but rose notably this last week. Cushing inventories drewdown by the most since Feb 2014 (we suspect the spillage was the driver) and distillates inventories drew down for the 5th straight week). Gasoline inventories built notably despite expectaions of a sizable draw.
With OPEC/NOPEC headlines the biggest drivers in recent days, the first inventory build in six weeks (according to API) sparked notable weakness in WTI after hours. The 2.7mm build (bigger than the 2mm expectation) is the largest since April. Gasoline stocks also rose (against expectations of a draw) as Cushing (and Distillates) saw a significant drawdown which we suspect are hurricane-affected moves.
Crude +2.7mm (+2mm exp)
Cushing -1.352mm (+100k exp)
Gasoline +688k (-900k exp)
For the first time in six weeks, crude inventories rose last week by the most in 6 months. We also note a massive drawdown in Distillates (most since Oct 2014) due to the Hurricane…