(Bloomberg) — The final week of 2023 is expected to be much quieter on Wall Street after a sharp rally that brought the U.S. stock market within striking distance of its record.
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Stocks edged higher on light volume, tracking the S&P 500's longest weekly rise since 2017. The Federal Reserve's dovish stance this month boosted risk appetite in a rise that took the American stock index less than 1% away from its all-time high, while at the same time adding to it led warnings of a retreat.
The so-called Santa Claus rally typically spans the last five trading sessions of the year and the first two of the new year. Overall, this trading period has a pretty strong record. According to the Stock Trader's Almanac, the S&P 500 has averaged a seven-day gain of 1.3% since 1969.
“The Santa Claus Rally indicator officially began last Friday,” said Craig Johnson, chief market technician at Piper Sandler. “We expect any pullbacks to be moderate and short-lived as investors follow the eight-week uptrend toward new highs.”
The economic calendar is poor this week, with property prices rising for the ninth month in a row. Early data from Mastercard SpendingPulse shows U.S. holiday retail sales rose much more slowly than in 2022 as selective shoppers sought value and special offers throughout the season.
Treasury bonds were mixed ahead of the sale of $57 billion in two-year notes at 1 p.m. New York time.
The U.S. bond market posted a fourth straight week of gains as investors remained confident that the Fed will begin cutting interest rates next quarter.
In corporate news, FedEx Corp. entered into an accelerated share repurchase agreement with Mizuho Markets Americas. The White House declined to lift a ban on sales of Apple Inc. smartwatches in the United States. Intel Corp. will invest a total of $25 billion in Israel. Bristol Myers Squibb Co. agreed to buy RayzeBio Inc. for about $4.1 billion.
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Elsewhere, oil prices rose as tensions remained high due to shipping disruptions in the Red Sea following a spate of Houthi attacks on ships in the vital waterway and after U.S. military strikes in Iraq. Shipping stocks largely fell after Maersk said it was preparing to resume shipping through the Red Sea.
Important events this week:
China's industrial profits, Wednesday
The Bank of Japan will publish a summary of statements from its December policy meeting on Wednesday
Japanese industrial production, retail sales, Thursday
US wholesale inventories, initial jobless claims, Thursday
Nationwide house prices in the UK, Friday
Some of the key moves in the markets:
Shares
The S&P 500 rose 0.3% at 11:34 a.m. New York time
The Nasdaq 100 rose 0.4%
The Dow Jones Industrial Average rose 0.3%
The MSCI World Index rose 0.3%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.1036
The British pound rose 0.2% to $1.2712
The Japanese yen was little changed at 142.49 per dollar
Cryptocurrencies
Bitcoin fell 2.8% to $42,317.01
Ether fell 2.2% to $2,222.97
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The yield on 10-year government bonds remained little changed at 3.90%
The yield on 10-year German government bonds has hardly changed at 1.98%
The yield on 10-year British government bonds has barely changed at 3.50%
raw materials
West Texas Intermediate crude oil prices rose 3.1% to $75.86 a barrel
Spot gold rose 0.3% to $2,059.78 an ounce
This story was produced with support from Bloomberg Automation.
– With support from Esha Dey, Jessica Menton, Carter Johnson, Liz Capo McCormick and Felice Maranz.
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