Published: Mon, December 03, 2018
Business | By Eloise Houston

Markets Right Now: Stocks surge on hint of slower rate hikes

Markets Right Now: Stocks surge on hint of slower rate hikes

Shares of Caterpillar and Boeing, companies with high overseas revenue exposure, rose 4.2 percent and 1.2 percent, respectively.

The Bloomberg Dollar Index sank the most in two weeks, fueling speculation its two-month rally may be over.

The pound reversed losses sparked by the Bank of England's warning that a no-deal Brexit could spark a recession.

"The Fed has paid lip service to data dependence in the last few years, but data dependence has now arrived", he said.

USA stocks had enjoyed a strong rally on Wednesday after Powell said US interest rates were "just below" neutral, less than two months after saying rates were probably "a long way" from that point. Recently the Chair had supported Gold prices having provided a rather cautious outlook, whereby he stated that while the U.S. economy is strong, the United States could face headwinds going into next year regarding slowing demand and fading fiscal stimulus. "Now investors are true believers - and are reacting accordingly".

Add to that the prospect of a shift in the global trade landscape following Saturday's dinner meeting between U.S. President Donald Trump and Chinese leader Xi Jinping, as well as the risk of a government shutdown in Washington, and the coming week could prove to be a significant one for the Treasury market. While this will unlikely a yield an outright agreement, there could be progress made to warrant further talks, alongside this, a potential truce in the trade war between China and the USA could see Gold prices on a firmer footing. The reading easily topped market forecasts.

Thursday sees the release of the minutes from the Federal Open Market Committee's November meeting.

U.S. crude oil futures settled down Dollars 1.27, or 2.5 percent, at USD 50.29 a barrel, the lowest since October 9, 2017 after USA crude inventories rose for a 10th straight week to the highest in a year. NY time, the biggest three-day gain since June. The trade dispute truce news is helping to drive US stock index futures higher, leading to the call for a 500 point gain on the opening of the Dow Jones Industrial Average.

USA crude rose 2.31 percent to $51.45 per barrel and Brent closed at $59.51, up 1.28 percent on the day.

The MSCI All-Country World Index climbed 1.7 percent.

The euro advanced 0.7 percent.

USA consumer spending rose 0.6 percent in October after a downwardly revised 0.2 percent advance, beating market consensus, said the Commerce Department. Palladium gained 0.4pc to $1,154.99 per ounce.

The global platinum market will be oversupplied by around half a million ounces both this year and next, an industry report said, suggesting little respite for producers facing prices languishing near 10-year lows.

"The 10-year note is perched at a critical level", said Chris Ahrens, chief market strategist at First Empire Securities in Hauppauge, New York.

Debt costs at the auction fell to their lowest in two months, with 10-year yields at 3.24 percent, down from 3.36 percent at October's auction, while five-year yields tumbled 23 bps versus last month.

West Texas Intermediate crude fell 2.1 percent to $50.45 a barrel.

The Dow Jones Industrial Average rose 192 points, or 0.8 percent, to 24,939.

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