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S&P 500 trades at record high: markets retreat

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

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Stocks edged higher amid low volumes, following the S&P 500’s longest weekly stretch since 2017. The Federal Reserve’s dovish pivot this month has fueled risk appetite in a surge that has kept l US stock index less than 1% from its all-time high while leading to warnings of a pullback.

The so-called Santa Claus gathering generally encompasses the last five trading sessions of the year and the first two of the new one. Overall, this trading period has a pretty strong track record. Since 1969, the S&P 500 has averaged a 1.3% gain over a seven-day period, according to the Stock Trader’s Almanac.

“The ‘Santa Rally’ indicator officially kicked off last Friday,” said Craig Johnson, chief market technician at Piper Sandler. “We expect any pullback to be modest and short-lived, as investors ride the eight-week uptrend to new highs.”

The economic calendar is thin this week, with data released Tuesday showing U.S. home prices rose for a ninth straight month, hitting a new record high as buyers vied for a stubbornly limited supply of homes. advertisement.

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

The U.S. bond market posted a fourth straight week of gains, boosting investor confidence that the Fed will begin cutting interest rates next quarter. Swap contracts tied to Fed meetings imply a more than 90% chance that the U.S. central bank will lower its current target rate range from 5.25% to 5.5% in March.

On the corporate side, FedEx Corp. entered into an accelerated share repurchase agreement with Mizuho Markets Americas. The White House has refused to reverse the ban on the sale of Apple Inc.’s smart watches in the United States. Bristol Myers Squibb Co. has agreed to buy radiology drug developer RayzeBio Inc. for about $4.1 billion.

Elsewhere, oil rose as tensions remained high over shipping disruptions in the Red Sea due to a series of Houthi attacks on ships in the vital waterway and after U.S. military strikes in Iraq. Iron ore reached its highest level since June 2022.

Key events this week:

  • Chinese industrial profits, 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 stocks and first jobless claims, Thursday

  • UK house prices on Friday

Some of the main market movements:

Actions

  • The S&P 500 rose 0.3% as of 10:32 a.m. New York time

  • The Nasdaq 100 rose 0.5%

  • The Dow Jones Industrial Average rose 0.3%

  • The MSCI World index increased by 0.3%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.2%

  • The euro rose 0.2% to $1.1028

  • The British pound rose 0.1% to $1.2708

  • The Japanese yen was little changed at 142.44 per dollar.

Cryptocurrencies

  • Bitcoin fell 1.9% to $42,702.06

  • Ether fell 1.2% to $2,243.77

Obligations

  • The yield on 10-year Treasury bonds was little changed at 3.89%

  • The German 10-year yield changed little at 1.98%

  • The UK 10-year yield was little changed at 3.50%

Raw materials

  • West Texas Intermediate crude rose 2.6% to $75.45 a barrel

  • Spot gold rose 0.2% to $2,057.90 an ounce

This story was produced with the help of Bloomberg Automation.

–With help from Esha Dey, Jessica Menton, Carter Johnson and Liz Capo McCormick.

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