On the first trading day of 2020, all three major indexes were able to post solid gains. The rally was fueled by optimism surrounding U.S.-China trade relations, as a phase-one deal is expected to be signed fairly soon. The Chinese central bank took steps to stimulate the economy, which has struggled amidst a global manufacturing slow-down and heightened trade tensions. European and Asian equities joined the U.S. in rallying, as did gold and oil. U.S Treasury yields fell, but the U.S. dollar was able to gain ground on most of its major peers. In M&A news, Anixter International accepted a sweetened takeover offer from Clayton, Dubilier & Rice.
The Dow Jones Industrial Average rose 330 points (1.2%) to 28,869, the S&P 500 was up 24 points (0.7%) to 3,255 and the NASDAQ rose 120 points (1.3%) to 9,092. 658 million shares were traded on the NYSE and 2.8 billion shares changed hands on the NASDAQ. WTI oil was up $0.08 to $61.14 per barrel and wholesale gasoline was flat at $1.70 per gallon. Elsewhere, the Bloomberg gold spot price rose $11.20 to $1,528.49 per ounce. The Dollar Index—a comparison of the U.S. dollar to six major world currencies—added 0.4% to 96.82.
In the first session of 2020, the major equity indexes extended the sharp gains registered in 2019. The global stock markets jumped in 2019 amid eased trade concerns as the U.S. and China are expected to sign a “phase one” trade deal early this year, cooled recession concerns as global growth has showed signs of stabilization, and preserved expectations that global central banks will remain highly accommodating with their monetary policies.
Weekly initial jobless claims dipped by 2,000 to 222,000, versus the Bloomberg estimate of 220,000, with the prior week’s figure being revised higher by 2,000 to 224,000. The four-week moving average rose by 4,750 to 233,250, while continuing claims increased by 5,000 to 1,728,000, north of estimates of 1,680,000.
The final Markit U.S. Manufacturing PMI Index was revised slightly lower to 52.4 for December, versus expectations to be unchanged at the preliminary estimate of 52.5, and below November’s 52.6 level. A reading above 50 denotes expansion. The release is independent and differs from the Institute for Supply Management’s (ISM) report, due to the variance of companies surveyed, while Markit weights its index components differently and its report has less historic value.
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