Daily Market Color

Retail Stocks Welcome Holiday Season

Stocks Rise as Holiday Season Begins

The Nasdaq and S&P 500 both hit new all-time highs during today’s trading session, despite thin volumes and an early 1pm EST close for stocks.  Today, Black Friday, marks the official opening of the 2017 holiday shopping season, which covers the last 10% of the year but generally accounts for 40% of annual sales for retailers.  Online spending this coming Monday (Cyber Monday) is forecast to exceed $6.6 billion in sales, the most on record and 16.5% higher than last year.  Bond markets in turn, closed at 2pm EST and experienced a mild selloff also on light volume, with Treasury yields/swap rates up 1-3 bps across the curve.  The US dollar traded marginally weaker against other major currencies, falling 0.2% against the broad spot currency index and -0.6% against the Euro, both new two-month lows.  Next week investors will turn their focus to the progress on tax reform, as Congress returns from the holiday week with a tight window to get a passable bill on President Trump’s desk before year end.



Russia on Board for Cut Extension

WTI crude oil futures approached $59/barrel for the first time in two years after it was reported that Russian energy officials were in support of an extension to the existing supply curbing pact between Russia and OPEC members, which is set to expire March 2018.  “Everyone is in favor of extending the deal to reach its final goals, Russia also supports these proposals,” Energy Minister Alexander Novak stated earlier today.  The announcement comes one week before OPEC and its allies are due to meet in Vienna, and an updated deal is now considered to be the most likely outcome of the gathering.



Merkel Gets Support from SPD

Earlier this week, political stability in Germany was lacking after failed coalition talks pointed to the potential for a minority government under Chancellor Angela Merkel.  However today, the Social Democrat party (SPD) declared its willingness to work with Merkel and the Christian Democratic Union to avoid such an outcome.  “The SPD is firmly convinced that talks are needed,” SPD Secretary General Hubertus Heil told reporters, but stopped short of admitting a need or want for a grand coalition.


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