Ahead of the US holiday, the dollar and the S&P 500 are both up.


Ahead of the US holiday, the dollar and the S&P 500 are both up.

Following a slew of mainly positive US economic statistics ahead of the holiday weekend, Wall Street equities mostly gained and the dollar rallied on Wednesday.

While concerns about further Covid-19 limitations weighed on European shares, two of the three major US indices climbed ahead of Thursday’s Thanksgiving holiday, when US markets are closed, and the “Black Friday” start of the holiday shopping season the next day.

The broad-based S&P 500 index came within a whisker of breaking an all-time high as jobless claims fell to their lowest level since 1969, while consumer income and expenditure both increased more than predicted.

Not every report was excellent. New house sales fell short of forecasts, while durable goods orders dropped.

“As we approach Thanksgiving, there is much to be grateful for in this fiscally-stimulated recovery,” Oxford Economics’ Gregory Daco remarked.

“However, the recovery process is far from complete, with service spending substantially below pre-pandemic levels, and the transfer from public to private-driven growth will be difficult.”

The Federal Reserve’s meeting minutes revealed heightened concerns over rising prices, as data showed inflation considerably beyond the central bank’s two-percent objective, at 5% in October 2021 compared to the same month the previous year.

The minutes raised hopes for a more rapid tightening of monetary policy.

They also helped lift the dollar, which was “bolstered by increasing rates on faster tapering forecasts, stronger data, and eurozone woes with growing Covid cases,” according to ThinkMarkets analyst Fawad Razaqzada.

In Europe, the DAX fell 0.4 percent after a center-left-led coalition of parties announced a deal to form the next government, placing the Social Democrats in power for the first time in 16 years.

Markets are weighing the possibility of more Covid-19 restrictions in Europe when the shift takes place.

The European Union’s health agency called on member states to “immediately” implement anti-Covid measures to limit the disease’s potential “extremely high” burden in December and January.

Oil prices dipped in response to the announcement that the US and five other countries would release oil from their strategic stockpiles, reversing a portion of Tuesday’s rise.

On Wednesday, the president of the International Energy Agency urged OPEC and its partners to take steps to lower oil prices to “reasonable levels.”

At a meeting in December, members of the OPEC+ group of countries will discuss their strategy, including whether they will carry out earlier plans to expand output.

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