U.S. equities finished the week at a record high as investors counted down to the holiday break. The dollar and 10-year Treasuries gained.
The S&P 500 index had its biggest weekly gain since September and was on pace to gain 28% this year. The benchmark hit a new peak Friday, led by technology and health-care shares, while the Stoxx Europe 600 also reached all-time high. The Treasury yield curve remained near its steepest in more than a year, underscoring how recession worries have receded.
“If the economy is not rolling over and going into a recession ditch, and tame core consumer inflation is low at 1.6%, you can bet your bottom dollar the Federal Reserve is going to keep enough punch in the punch bowl to make sure that 2020 is going to be a super year for stocks,” said Chris Rupkey, chief financial economist for MUFG Union Bank.
Equity trading in the U.S. spiked as the session drew to a close as major indexes rebalanced and options and futures on indexes and stocks expired in what’s known as quadruple witching.
Investors have largely been in a holding pattern this week, buffeted by conflicting macro winds. President Donald Trump’s impeachment has morphed into a standoff, yet U.S. lawmakers managed to pass spending bills Thursday to avoid a partial government shutdown. The signing of a first-phase U.S.-China trade deal was set for January.
And while the logjam in U.K. politics is over, the prospect of a messy break from the European Union is back on the agenda. The pound saw its worst weekly decline in more than two years amid concern that Prime Minister Boris Johnson and EU negotiators will struggle to agree a trade deal next year. The euro also weakened.
India’s longer-dated bonds jumped after the central bank unveiled plans to mount something akin to the U.S. Operation Twist, which may help spur credit growth. Shares rose in Hong Kong and Seoul but fell in Tokyo, Shanghai and Sydney. Oil and gold slipped.
These are the main moves in markets:
-The S&P 500 index increased 0.5% to 3,221.19 as of 4:02 p.m. New York time, the highest on record.
-The Dow Jones Industrial Average advanced 0.3% to 28,454.82, the highest on record.
-The Stoxx Europe 600 index jumped 0.8% to 418.40, the highest on record.
-The MSCI Emerging Market index gained 0.1% to 1,107.55.
-The MSCI World index of developed countries climbed 0.4% to 2,349.13, the highest on record.
-The Bloomberg Dollar Spot index increased 0.2% to 1,197.49, the highest in more than a week on the biggest climb in almost four weeks.
-The British pound declined 0.1% to $1.3003, the weakest in more than two weeks.
-The euro decreased 0.4% to $1.1075, the weakest in more than a week on the biggest dip in more than six weeks.
-The Japanese yen weakened 0.1% to 109.49 per dollar.
-The yield on 10-year Treasuries decreased less than one basis point to 1.92%, the first retreat in a week.
-The yield on two-year Treasuries gained less than one basis point to 1.63%, the highest in a week.
-Germany’s 10-year yield decreased two basis points to -0.25%.
-Britain’s 10-year yield dipped two basis points to 0.782%.
-West Texas Intermediate crude declined 1.4% to $61.22 a barrel, the biggest drop in almost three weeks.
-Gold weakened 0.1% to $1,477.64 an ounce, the largest fall in a week.
– – –
Bloomberg’s Christopher Anstey and Nancy Moran contributed to this report.
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