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While you were sleeping: Stocks, oil, dollar slip

Friday 30th December 2016

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Equities, oil and the US dollar weakened as investors took some profits in year-end trading.

Wall Street eased. In 12.48pm trading in New York, the Dow Jones Industrial Average slipped 0.1 percent, while the Nasdaq Composite Index fell 0.2 percent. In 12.34pm trading, the Standard & Poor’s 500 Index retreated 0.1 percent.

Investors are “taking profits and some risk off the table,” Mike van Dulken, head of research at Accendo Markets in London, wrote in a note, according to Bloomberg.

In the Dow, slides in shares of Goldman Sachs and those of JPMorgan Chase, down 1.5 percent and 1.4 percent respectively, recently outweighed advances in the shares of Verizon and those of Johnson & Johnson, that were recently trading 0.8 percent and 0.6 percent higher respectively.

"The market is looking like it has gotten a bit ahead of itself, and while I'm not turning bearish, I am becoming a bit more cautious in the near-term," Robert Pavlik, chief market strategist at Boston Private Wealth, told Reuters.

"I wouldn't be surprised to see the market begin the year with a little bit of a rally and start to give back quickly,” Pavlik noted.

US Treasuries rose, sending yields on the 10-year note 2 basis points lower to 2.49 percent.

“Almost nobody believes Trump can implement everything he’s promised to do,” Satoshi Okagawa, senior global market analyst at Sumitomo Mitsui Banking in Singapore, told Bloomberg. “At some point, Treasury markets will come to realise that, and yields will decline.”

In the latest deal news, Johnson & Johnson is negotiating an agreement to acquire Switzerland's Actelion that would separate its commercialised portfolio from its research and development assets, Reuters reported, citing people familiar with the matter.

Meanwhile, there was further evidence of strength in the US jobs market. A Labour Department report showed initial claims for state unemployment benefits declined 10,000 to a seasonally adjusted 265,000 for the week ended December 24.

“On the whole, we continue to expect further improvement in labour market conditions,” Barclays economist Michael Gapen said in a note to clients, according to the Wall Street Journal.

Separately, a Commerce Department report showed the US trade deficit in goods widened in November from the prior month, as exports fell and imports rose.

In Europe, the Stoxx 600 Index finished the day with a 0.4 percent decline from the previous close. France’s CAC 40 Index and Germany’s DAX Index each closed 0.2 percent lower. The UK’s FTSE 100 Index rose 0.2 percent.

Oil prices slid after a US Energy Information Administration showed crude oil stocks unexpectedly climbed last week.

"The fact that crude oil supplies were able to build as refineries operated at high levels and at a time of year when tax concerns usually lower supplies is bearish," John Kilduff, a partner at Again Capital, a New York-based hedge fund that focuses on energy, told Bloomberg.


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