On Wednesday, Brent crude prices edged towards $57 a barrel. This came in response to weak Chinese manufacturing data as well as demand concerns. According to the final report, the HSBC/Markit Purchasing Managers’ Index (PMI) came in at 49.6 for December. While this final reading was higher than a “flash” reading of 49.5, it was still down from the final 50.0 in November. The 50.0 mark separates growth from contraction. Since China is the world’s 2nd largest oil consumer, a contraction in its factory sector could have a big impact on demand. As a result, Brent for February delivery fell 44 cents to $57.46 as of 0350 GMT. This came after falling earlier as low as $57.18. Meanwhile, U.S. crude for February delivery was down 34 cents to $53.78. Prices were also pressured by an unexpected build in U.S. crude stocks. According to the industry group the American Petroleum Institute, U.S. crude inventories rose by 760,000 barrels last week to 387.3 million. Analysts were expecting a decreased of around 100,000 barrels. Meanwhile on Tuesday, the Obama administration bowed to months of growing pressure over a 40-year-old ban on exports of most domestic crude. This step is expected to unleash a wave of ultra-light shale oil onto global markets.
The USD Pushes Lower
On Tuesday, the U.S. dollar (USD) traded lower against the other major currencies. This came in response to the release of lower-than-expected U.S. consumer confidence data while investors also used the opportunity to lock in profits from the greenback’s recent rally to nine-year highs. According to the Conference Board report, the U.S. consumer confidence index (CCI) rose to 92.6 this month from 91.0 in November. This number missed analysts’ expectations for the index to rise to 93.2 in December. Despite this weak data, the greenback remained supported by the positive GDP data from last week that showed that the U.S. gross domestic product rose 5.0% in the third quarter. The EUR/USD edged up 0.11% to 1.2168, off two-year lows of 1.2124 hit earlier in the session. Meanwhile, the British pound edged higher against the USD, with GBP/USD up 0.21% to 1.5553. Elsewhere, USD/JPY tumbled 1.17% to 119.23, while the Swiss franc eased off two-year lows, with USD/CHF down 0.11% to 0.9886. The U.S. dollar index, which measures the greenback against a basket of six major currencies, was down 0.35% to 90.22, not far from the nine-year high of 90.66 hit overnight.
The Dow Slips Under the 18,000 Mark
On Tuesday, U.S. stocks closed with moderate losses. The Dow Jones Industrial Average (DJIA) moved down below the 18,000 for the first time in about a week after reaching above this level on the 23rd of December 2014. At the close of U.S. trading, the DJIA shed 55.16 points, or 0.3%, to 17,983.07. Also on the downside was the S&P 500 index (SPX) which declined 10.22 points, or 0.5%, to finish at 2,080.35. This came a day after the index scored its 53rd record close of the year. Following the downward trend was the Nasdaq Composite Index (COMP) which lost 29.47 points, or 0.6%, to end at 4,777.44. All three main indexes endured their biggest drops in two weeks. The S&P is on pace for a yearly gain of 12.6% while the Dow is showing an 8.5% advance and the Nasdaq a 14.4% rise. On Wednesday, the U.S. markets will be open for a full trading day.
In the Spotlight – When Are Markets Closing Over New Year’s?
We are almost closing 2014 and getting ready to start 2015 with a bang. So what happens to the global markets on New Year’s Eve? Well, virtually all major markets around the world will be closed on New Year’s Day as follows:
Both the Nasdaq and the New York Stock Exchange will observe regular trading hours on Wednesday, closing at 4 p.m. Eastern. On Thursday, the 1st of January 2015, the markets will be closed. Regular trade will resume on Friday, the 2nd of January 2015.
For bond traders, the market will close earlier with Sifma, the securities industry trade group, closing at 2 p.m. Eastern on Wednesday. Meanwhile, in the futures markets, the CME Group will close Chicago floor trading in foreign-exchange and interest-rate futures early, at 1 p.m. Eastern on Wednesday. Also in New York, NYMEX energy futures will close an hour early as well at 1:30 p.m. Eastern while Comex gold and other metals futures will end trading at 12:30 Eastern, also an hour early.
In Asia, markets in Hong Kong and Australia will trade for a half-day on New Year’s Eve. Meanwhile, the markets in Thailand, Japan, South Korea, Indonesia and the Philippines will be closed.
In Europe on New Year’s Eve, London equity trading will close early at 12:30 p.m. local time, or 8 a.m. Eastern Time. Trading in France and Spain will close at 2 p.m. local time or 1 p.m. London time. In Germany and Italy, the last day of 2014 trading was Tuesday, 30 December 2014.