Stocks Notch Fresh Records Amid Vaccine Enthusiasm…..

U.S. equities finished higher and at fresh record highs, boosted again by optimism on continued progress on the COVID-19 vaccine front, as well as hope of a fiscal relief package on the near horizon. However, concerns surrounding the impacts of some reinstated measures to combat the rise in virus cases kept the gains in check, as well as some mixed economic news, with another disappointing read on initial jobless claims coming up against housing construction activity data that topped forecasts and divergent regional manufacturing reports. On the equity front, Lennar Corporation posted upbeat earnings, Rite Aid rallied on its Q3 performance and outlook, and Roku announced it will carry AT&T’s HBO Max service. Global monetary policies were also in focus after yesterday’s dovish tone from the Fed, and as the Bank of England and Swiss National Bank left their stances unchanged. Treasury yields were higher amid a decline in bond prices and the U.S. dollar tumbled, while gold and crude oil prices gained ground. Europe finished mixed, while markets in Asia were mostly higher.

The Dow Jones Industrial Average rose 149 points (0.5%) to 30,303, the S&P 500 Index gained 21 points (0.6%) at 3,722, and the Nasdaq Composite advanced 107 points (0.8%) to 12,765. In heavy volume, 959 million shares were traded on the NYSE and 4.9 billion shares changed hands on the Nasdaq. WTI crude oil was $0.54 higher at $48.36 per barrel and wholesale gasoline added $0.04 to $1.39 per gallon. Elsewhere, the Bloomberg gold spot price rose $18.68 to $1,883.48 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.7% to 89.85.

Jobless claims continue to accelerate, housing construction activity beats forecasts…..

Weekly initial jobless claims came in at a level of 885,000 for the week ended December 12, below the Bloomberg estimate of 818,000, and compared to the prior week’s upwardly-revised 862,000 level. The four-week moving average rose by 34,250 to 812,500, while continuing claims for the week ended December 5 fell by 273,000 to 5,508,000, above estimates of 5,700,000. The four-week moving average of continuing claims dropped by 215,500 to 5,726,250.

Housing starts for November rose 1.2% month-over-month (m/m) to an annual pace of 1,547,000 units, above forecasts of 1,535,000 units, and compared to October’s downwardly-revised pace of 1,528,000 units. Also, building permits, one of the leading indicators tracked by the Conference Board as it is a gauge of future construction, rose 6.2% m/m at an annual rate of 1,639,000, north of expectations of 1,560,000 units, and compared to the downwardly-revised 1,544,000 unit pace. The rise in starts came amid increases in both single-unit and multi-unit structures, while the jump in permits was fueled by gains for multi-unit structures. Both single-unit and multi-unit starts and permit activity were higher versus the prior year.

The Philly Fed Manufacturing Index fell more than expected but remained in expansion territory (a reading above zero) for December, dropping to 11.1 versus estimates of a decline to 20.0 from November’s 26.3 level. Growth in new orders, shipments and employment all decelerated.

The December Kansas City Fed Manufacturing Activity Index unexpectedly moved further into a level depicting expansion (a reading above zero). The index rose to 14 from November’s 11 reading, and compared to forecasts calling for a decrease to 9.

Treasuries were lower, as the yields on the 2-year and 10-year notes, along with the 30-year bond, ticked 1 basis point (bp) higher to 0.12%, 0.93% and 1.68%, respectively.

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