The economy is withstanding an overseas slowdown
The S&P 500 added 0.2 percent at 2:55 p.m. in New York. The MSCI Emerging Markets Index climbed 0.8 percent, snapping a five-day losing streak, and the Stoxx Europe 600 Index advanced 0.7 percent. Shares in Shanghai jumped to an almost three-year high after a date was set for an exchange link between Hong Kong and Shanghai. The yield on 10-year Treasuries gained 6 basis points to 2.36 percent. The ruble climbed at least 1.6 percent against 31 major currencies as Russia vowed to take steps to curb speculators.
U.S. stocks reached all-time highs last week as data supported speculation the economy is withstanding an overseas slowdown and the end of the Federal Reserve’s stimulus program. The Bank of Russia said today the economy will probably stagnate in 2015, highlighting the damage wrought by a slump in oil prices and sanctions linked to the conflict in Ukraine.
“The numbers in the third quarter showed a steady economy, we continue to have oil below $80, consumers feeling confident, low interest rates, and that’s a combination that works well for stocks,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “The growth slowdown is definitely something to watch overseas but I think we got through that. The central banks have also been quite accommodative in what they’ve been saying and it seems to be working.”
The S&P 500 has rebounded 9.4 percent from a six-month low on Oct. 15. The index rose 0.7 percent last week for a third straight gain and closed Nov. 7 at a record.
Data last week showed U.S. employment gains exceeded 200,000 for a ninth straight month in October, although the result fell short of economists’ projections. The jobless rate unexpectedly fell to a six-year low, even as more people entered the labor force. Figures last month indicated the U.S. economy expanded faster than estimated in the third quarter amid better-than-forecast corporate earnings.
Last week’s rally “celebrated the fundamentals” as earnings and economic data point to “sustainability” of the expansion, John Stoltzfus, Oppenheimer & Co. chief market strategist, wrote in a note to investors today.