S&P 500 trades at all-time high: Markets wrap

(Bloomberg) — The last week of 2023 is expected to be quieter on Wall Street after a ferocious rally that put the U.S. stock market within striking distance of its record.

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Stocks rose on lower trading volume, after the S&P 500's longest weekly rise since 2017. The Federal Reserve's dovish approach this month has added to risk appetite in a rally that has put the gauge of US stocks 1% away from an all-time high. While it led to warnings of retreat.

The so-called Santa Claus rally usually includes the last five trading sessions of the year and the first two of the new one. Overall, this trading period has a very strong track record. Since 1969, the S&P 500 has averaged a 1.3% gain over a seven-day period, according to Stock Traders' Almanac.

“The Santa Claus Rally officially began last Friday,” said Craig Johnson, senior market technician at Piper Sandler. “We expect any declines to be modest and short-lived as investors follow the eight-week uptrend toward new highs.”

The economic calendar is weak this week, with home prices rising for the ninth straight month. Early data from Mastercard SpendingPulse shows that U.S. holiday retail sales rose at a much slower pace than in 2022, as selective shoppers sought value and promotions throughout the season.

Treasuries were mixed ahead of the $57 billion sale of two-year bonds at 1 p.m. New York time.

The US bond market posted gains for the fourth straight week thanks to building investor confidence that the Federal Reserve will start cutting interest rates next quarter.

In corporate news, FedEx Corp. Accelerated share repurchase agreement with Mizuho Markets Americas. The White House refused to lift the ban on sales of smart watches produced by Apple in the United States. Intel will invest a total of $25 billion in Israel. Bristol-Myers Squibb has agreed to acquire RayzeBio Inc. For about $4.1 billion.

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Elsewhere, oil rose as tensions persisted over disruption to shipping in the Red Sea due to a wave of Houthi attacks on ships in the vital waterway, and after US military strikes in Iraq. Shipping stocks fell broadly after Maersk said it was preparing to resume shipping through the Red Sea.

Main events this week:

• Industrial profits in China, Wednesday

• The Bank of Japan releases a summary of views from its December monetary policy meeting on Wednesday

• Japanese industrial production, retail sales, Thursday

• US Wholesale Inventories, Initial Jobless Claims, Thursday

• House prices nationwide in the UK, Friday

Some key movements in the markets:

Stores

• The S&P 500 rose 0.3% as of 11:34 a.m. New York time

• Nasdaq 100 index rises 0.4%

• The Dow Jones Industrial Average rose 0.3%

• MSCI World Index rose 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%.

• The euro rose 0.3 percent to $1.1036

• The British pound rose 0.2% to $1.2712

• There was little change in the Japanese yen at 142.49 to the dollar

Digital currencies

• Bitcoin fell 2.8% to $42,317.01

• Ethereum fell 2.2% to $2,222.97

Bonds

• The yield on 10-year Treasury bonds was little changed at 3.90%.

• The yield on 10-year German bonds was little changed at 1.98%.

• There was little change in the yield on British 10-year bonds at 3.50%.

Goods

• West Texas Intermediate crude rose 3.1% to $75.86 a barrel

• Gold in spot transactions rose 0.3 percent to $2,059.78 per ounce

This story was produced with assistance from Bloomberg Automation.

–With assistance from Isha Dey, Jessica Minton, Carter Johnson, Liz Capo-McCormick, and Phyllis Marans.

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