By IFCMarkets
US stock markets recorded marginal gains on Monday with investors’ optimism supported by the release of US payroll figures on Friday on the backdrop of weak global economic growth. The S&P 500 closed at a new record high, adding 6.34 points, or 0.3%, higher at 2,038.26. The The Nasdaq Composite rose 19.08 points, or 0.4%, to 4,651.62, the highest level since March 2,000. On Monday the Federal Reserve released its new monthly labor market conditions index, based on 19 separate U.S. labor market indicators, including the unemployment rate and labor force participation rate. The index showed an unchanged 4.0 level for October, providing a modest boost to investor confidence amid concerns over slow recovery in job market. Experts indicate that falling oil prices will likely provide still further momentum for US economic growth as lower gasoline prices will free up consumer spending and the increased consumption component of GDP will outweigh the loss of earnings by energy companies.
European stock markets rebounded on Monday as oil company stocks rose with rising energy prices and companies boosted acquisition activity in the oil services industry . The Stoxx Europe 600 index gained 0.2% to 335.96, after closing out last week with a 0.5% weekly slide. In a speech on Monday a senior ECB policy maker, Executive Board member Yves Mersch said the European Central Bank could examine the possibility of buying state bonds as the bloc’s recovery and that of its top economy, Germany, has lost pace. Asian stocks rose today, helped by the gains on Wall Street. The MSCI Asia Pacific Index advanced 0.3 percent by 1:45 pm in Tokyo, with Hong Kong’s Hang Seng Index climbing 0.6 percent. Japanese shares outperformed in Asia on Tuesday, with the Nikkei stock average rising more than 2 percent to a 7-year high as investors expect Prime Minister Shinzo Abe may postpone a planned sales tax increase and call early elections.
West Texas Intermediate crude oil fell for a second day as forecasts for a sixth weekly gain in US crude stockpiles bolstered speculation that rising supply is outpacing demand. Brent Oil for December settlement dropped 1.3 percent to close at $82.34 yesterday, the lowest level since October 2010. The European benchmark crude traded at a premium of $5 to WTI. Amid signs that global supply is outpacing demand OPEC Secretary General Abdullah al-Badri told markets not to “panic” over low oil prices at an industry conference in Abu Dhabi. OPEC’s second-largest producer, Iraq, has joined Saudi Arabia in fighting to protect its market share. This is another indication the major oil producers are not planning to cut production in near future.
With dollar gaining strength and US economy improving gold is under pressure and was trading above the lowest level since 2010. Gold for December delivery slid 1 percent to $1,148.50 an ounce on the Comex in New York after most-active prices sank to $1,130.40 on November 7, the lowest level since April 2010. Silver for immediate delivery slid 0.7 percent to $15.507 an ounce. Spot platinumwas at $1,197.88 an ounce from $1,198 yesterday and palladium rose 0.2 percent to $764.50 an ounce.
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