Friday sees S&P500 achieve new high for 2023

The S&P 500 rose on Friday to hit a new high for the year after the November jobs report and University of Michigan consumer survey data signalled a resilient economy and cooling inflation, fuelling hopes for a so-called soft landing scenario.

The S&P 500 added 0.41 per cent to settle at 4,604.37, while the Nasdaq Composite rose 0.45 per cent to finish at 14,403.97. The Dow Jones Industrial Average gained 130.49 points, or 0.36 per cent, to end at 36,247.87.

All the major averages finished the week with gains. The broad market index jumped 0.2 per cent for the period, and the Dow finished marginally higher. Both indexes wrapped six winning weeks, their longest run since 2019. The Nasdaq advanced 0.7 per cent.

November’s nonfarm payrolls report showed an unexpected drop in the unemployment rate. The jobless rate fell to 3.7 per cent in November from 3.9 per cent the prior month. It was expected to remain the same. The economy added 199,000 jobs, slightly ahead of the 190,000 estimate from Dow Jones and well ahead of the 150,000 jobs added in October.

The data first raised concerns that the economy was running too hot for inflation to cool enough for the Fed to start retreating from its high-rates policy. Some traders expect the Fed to start cutting rates as early as next spring, with its latest policy meeting set for Wednesday.

On the other hand, the monthly jobs report could also support the notion that the Fed is guiding the U.S. economy toward a soft landing — a steady economic recovery amid falling inflation. Average hourly earnings, seen as a leading indicator of inflation, rose about as expected in November as the economy added more jobs than the prior month.

Meanwhile, a closely watched University of Michigan survey showed inflation expectations drop and consumer sentiment jump in December to it highest level since July.

Shares of Boeing, FedEx, and Costco hit new highs for the year on Friday as investors bet the economy would skirt a recession.

Turning to US sectors, Energy and Tech were the best performers on Friday. Consumer Staples was the worst.

Despite recent legal setbacks for industry leaders, Bitcoin has experienced a resurgence with its price surging around 160 per cent this year to reach a 20-month high of $44,000, attracting renewed interest from traders. Bulls are optimistic that these prosecutions could mark a turning point for the sector, potentially unlocking substantial investments from Wall Street.

China is aggressively seeking to secure a significant share of the global uranium supply in response to the increasing worldwide demand for nuclear fuel, according to the CEO of London-listed investment firm Yellow Cake. Uranium has seen a remarkable 70 per cent price increase this year, reaching $81 per pound, driven by government support for nuclear energy as a reliable and low-carbon power source, especially as gas prices surged in the previous year.

Anglo American's shares experienced their largest one-day decline since the 2008 financial crisis following the company's announcement of production cuts aimed at cost reduction and increased profitability. The stock plummeted 19 per cent to £18.02, reaching its lowest level in three years and marking a 44 per cent decrease since the beginning of the year, making it the poorest-performing stock among major diversified mining groups like BHP, Rio Tinto, and Vale.

US crude faces a rare seven-week losing streak due to record production, demand concerns, and doubts about OPEC cuts amidst internal divisions. Both WTI and Brent crude lost around 4 per cent for the week despite a Friday rally.

Futures

The SPI futures are pointing to a 0.22 per cent rise.

Currency

One Australian dollar at 7:15 AM was buying 65.74 US cents.

Commodities

Gold has lost 1.56 per cent. Silver has fallen 3.25 per cent. Copper has gained 0.87 per cent. Oil has added 2.73 per cent.

Figures around the globe

European markets closed higher on Friday. London’s FTSE added 0.54 per cent, Frankfurt gained 0.78 per cent, and Paris closed 1.32 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei fell 1.68 per cent, Hong Kong’s Hang Seng lost 0.07 per cent while China’s Shanghai Composite closed 0.11 per cent higher.

On Friday, the Australian share market closed 0.3 per cent higher at 7,194.92.

Ex-dividends

One company is going ex-dividend. Advanced Share Registry (ASX:ASW) is paying 0.25 cents fully franked.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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