(Bloomberg) – U.S. Treasuries held steady, while stocks edged higher as a flurry of new data led traders to gauge the possibility of a soft landing for the world’s largest economy.
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The Nasdaq 100 index rose 0.2%, the tech-heavy benchmark hitting a record high for the fourth straight session. The S&P 500 index posted a similar-sized gain and remained within range near all-time highs. The gauge’s relative strength measurements are trading at levels typically seen before a decline.
“It certainly looks like a very one-sided situation,” Cameron Dawson, chief investment officer at NewEdge Wealth, told Bloomberg TV. ” he said. “We see the market as very extended and very overbought. But we are in this melt-up period and things could get worse before the economy actually recovers. It often gets weird.”
Traders analyzed data that showed U.S. consumer confidence in December showed its biggest rise since early 2021. The second straight month of gains suggests Americans are less worried about a recession, but economists remain wary of the job market.
Rubela Farooqi of High Frequency Economics said: “A sustained improvement in confidence will send positive signals on consumer attitudes and spending, but a restrictive policy stance will not ease labor market conditions. “This is likely to weigh on future demand, consumption and growth.” I have written.
Separately, a report from the National Association of Realtors said U.S. existing home sales rose slightly from a 13-year low in November, with earlier data showing mortgage rates at their lowest level since June. It is shown that it has decreased.
Heading into 2023, some of Wall Street’s biggest bulls say they expect further strength next year as the labor market remains strong and confidence increases that the Federal Reserve will cut interest rates.
Of the strategists tracked by Bloomberg, Tom Lee of Fundstrat Global Advisors LLC, who came closest to predicting the S&P 500’s trajectory this year, expects the benchmark to reach 5,200 in 2024.
Read more: Stock optimists hit the mark on their 2023 predictions and are looking forward to more gains
But some remain wary of the continued rise.
“Let’s just enjoy the quiet for now,” Jim Caron, portfolio solutions CIO at Morgan Stanley Investment Management, told Bloomberg TV. “Looking forward, the situation will become even more volatile and more uncertain.”
Read the Watch: Morgan Stanley sees a year of living dangerously
The drop in profits at FedEx, widely seen as a bellwether for the U.S. economic outlook, heightened concerns about an economic downturn. The company’s stock fell 11% in New York trading.
Investors have also begun weighing the risks posed by the potential for shipping delays and higher freight rates as companies divert cargo from the Red Sea to avoid insurgent attacks. Bloomberg Economics wrote that the route change would mean higher shipping costs and longer delivery times.
The yield on the U.S. 10-year Treasury note has fallen 5 basis points to July levels, and the benchmark interest rate has fallen more than 40 basis points this month. British 10-year bonds led the global bond rally after data showed inflation slowing in the UK.
U.S. investors will next look to upcoming data releases, including Thursday’s GDP numbers and Friday’s data on personal consumption spending, the Fed’s preferred measure of inflation.
In commodities, crude oil prices fell as gold prices fell.
This week’s main events:
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Bank Indonesia interest rate decision Thursday
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US GDP, Initial Unemployment Insurance Claims, Conf. Board Leading Index, Thursday
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Nike’s Thursday results
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Japan’s inflation, Friday
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UK GDP, Friday
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U.S. Personal Income and Expenditures, New Home Sales, Durable Goods, University of Michigan Consumer Confidence Index, Friday
The main movements in the market are:
stock
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As of 1:34 p.m. New York time, the S&P 500 was up 0.2%.
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Nasdaq 100 rose 0.2%
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The Dow Jones Industrial Average rose 0.1%.
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MSCI World Index rose 0.2%
currency
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Bloomberg Dollar Spot Index little changed
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The euro fell 0.2% to $1.0962.
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The British pound fell 0.5% to $1.2668.
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The Japanese yen remained almost unchanged at 143.79 yen to the dollar.
cryptocurrency
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Bitcoin rose 3.7% to $44,082.61.
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Ether rises 2% to $2,227.83
bond
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The 10-year Treasury yield fell 5 basis points to 3.88%.
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German 10-year bond yield fell 4 basis points to 1.97%
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UK 10-year bond yields fell 12 basis points to 3.53%.
merchandise
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West Texas Intermediate crude oil fell 0.1% to $73.83 a barrel.
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Spot gold fell 0.3% to $2,035.05 an ounce.
This article was produced in partnership with Bloomberg Automation.
–With assistance from Vildana Hajric, Alexandra Semenova, Sagarika Jaisinghani, Sujata Rao, and Alice Atkins.
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