US close: Stocks rise ahead of Thanksgiving holiday

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Nvidia Corp.

$135.40

13:10 01/11/24

1.99%

$2.64

Wall Street finished with gains on Wednesday, driven by the release of the Federal Reserve’s latest policy meeting minutes overnight, which indicated a cautious approach to interest rate cuts.

Nasdaq 100

20,033.14

12:15 01/11/24

0.72%

142.73

Investors also considered fresh economic data, including jobless claims and consumer sentiment figures, in anticipation of the Thanksgiving holiday.

The Dow Jones Industrial Average closed with a 0.53% increase, reaching 35,273.03 points.

Similarly, the S&P 500 saw a 0.41% rise, closing at 4,556.62 points, while the Nasdaq Composite gained 0.46%, finishing the day at 14,265.86 points.

In the currency market, the dollar was last up 0.01% on both sterling and the euro, trading at 80.05p and 91.85 euro cents, respectively.

Conversely, the greenback decreased 0.04% against the yen to change hands at JPY 149.48.

“Historically, US stocks tend to do well in the run-up to Thanksgiving, and this upward bias continues to exhibit itself despite the huge gains made over the past month,” said IG chief market analyst Chris Beauchamp.

“Traders on Wall Street can skip off to their turkey and pumpkin pie with satisfaction, having restored the bullish trend of the half of the year, exemplified by the Nasdaq 100 hitting its highest level since January 2022.

“While the Fed minutes did not deliver any reasons to hope for early rate cuts, investors can be thankful that no more rate hikes appear likely.”

Job market shows unexpected strength, consumer confidence dips

In economic news, the US job market displayed unexpected strength last week.

According to the Department of Labor’s latest report, when adjusted for seasonal factors, initial unemployment claims saw a notable decline of 24,000 during the week ended 18 November, reaching a total of 209,000.

That figure defied consensus expectations, which had projected 226,000 initial claims.

Furthermore, the four-week moving average decreased by 750, settling at 220,000.

In addition to the positive trend, secondary unemployment claims, representing those not filing for the first time and referencing the week ended 11 November, dropped by 22,000, with approximately 1.84 million such claims.

“One undershoot is not enough to determine if the rising trend in claims is starting to flatten,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“That said, leading indicators suggest claims will level off again soon.

“Layoff announcements and WARN notices - the best near-term leading indicators of jobless claims - have risen from their summer lows, but aren’t clearly trending higher.”

Contrasting that improvement in the job market, Americans’ overall confidence in the economy saw a dip in November, though there was a silver lining in their sentiments regarding personal finances.

According to a highly-watched survey by the University of Michigan, the consumer confidence index slipped from October’s reading of 63.8 to 61.3.

Within the index, a sub-category reflecting views on current economic conditions also declined, moving from 70.6 to 68.3.

Meanwhile, expectations regarding future economic conditions decreased from 59.3 to 56.8.

One noteworthy aspect was persistent concern among consumers regarding rising inflation.

Despite the mixed sentiment, the survey highlighted that Americans continued to anticipate higher inflation rates in the foreseeable future.

“More favourable current assessments and expectations of personal finances were offset by a notable deterioration in expected business conditions,” said the survey’s director, Joanne Hsu.

“In particular, long-run business conditions plunged by 15% to its lowest since July 2022.

“Younger and middle-aged consumers exhibited strong declines in economic attitudes this month, while sentiment of those aged 55 and older improved from October.”

Meanwhile, expectations for inflation one year ahead rose from 4.2% for October to 4.5% - their highest level since April 2023.

For the longer term, they increased from 3.0% to 3.2%.

“These expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation - consumers appear worried that the softening of inflation could reverse in the months and years ahead,” Hsu added.

Nvidia and Deere decline, HP rises on results

In equity markets, chipmaker Nvidia declined 2.46% after it reported third-quarter adjusted earnings and revenue that surpassed expectations but also issued a cautionary note.

The company warned that export restrictions related to China would impact its performance in the fourth quarter.

Agricultural equipment manufacturer Deere & Company also faced a downturn, with its shares falling by 3.11%.

The drop came after Deere issued guidance for fiscal year 2024 that fell short of market expectations.

On the upside, computing giant HP added 2.83% after it reported generally strong financial results and announced plans to introduce its first AI-powered PCs in the latter half of next year.

Reporting by Josh White for Sharecast.com.

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