Markets continue rising - 4.12.2014

US markets rose on Wednesday following a rebound in oil and gas prices. The S&P 500 closed at a record for the 48th time this year, after gaining 0.4%, to 2,074.32. Most of the gains came from materials, industrials and energy sector stocks, with all three sectors rising more than 1%. The Dow Jones Industrial Average closed at an all-time high for the 33rd time this year after adding 0.2% to 17,912.62. Payrolls processor ADP reported US private-sector employment rose by 208,000 last month, at a slower pace than the 233,000 increase in October. In a separate report, the Institute for Supply Management said its index of services sector activity rose to 59.3 last month from 57.1 in October. A Labor Department report showed compensation per hour increased at a tepid 1.3 percent rate in the third quarter against the 2.3 percent recorded last month, while in the second quarter it fell at a 0.9 percent rate instead of rising at a 2.3 percent pace as previously reported. The downward revisions eased the concern that the Fed may revise its plans to hike interest rates sooner if wage growth rose faster than the Fed anticipated. Today at 14:30 CET US Continuing Claims and Initial Jobless Claims for November 22 and 29 respectively will be released. The Initial Jobless claims are expected to come below the previous week’s level of 313000.

European stocks rose on Wednesday ahead of the highly anticipated ECB meeting today at 13:45 CET, where investors are expecting President Mario Draghi will announce further plans for expanding monetary easing program. The Stoxx Europe 600 index ended up 0.6% at 349.34, its highest level in 6 months. On Wednesday, the final eurozone composite purchasing managers index missed forecasts and came in at 51.1, down from 52.1 in October. Experts estimate the slowing of economic activity will translate into mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the New Year. This increases pressure on ECB to expand the monetary easing measures and markets expect ECB will start government-bond purchases program early next year. In anticipation of further central bank monetary easing the euro traded at $1.23, its lowest level since July 2012. Asian stocks rose on Thursday on positive reports on US economy and expectations of more stimulus measures by ECB. Tokyo's Nikkei climbed 0.8 percent to near 7-1/2-year highs as a weak yen drove exporter shares. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.4 percent. The Shanghai Composite Index rose 2.3 percent as investors anticipate further stimulus measures after recent interest rate cut by China’s central bank.

On the New York Mercantile Exchange, WTI Oil for January delivery rose 0.8%, to settle at $67.38 a barrel after a US government-supply report showed an unexpected decline in crude inventories. After OPEC’s decision to leave the production levels unchanged, analysts expect WTI will settle somewhere above the shale oil price floor estimated to be around $50 a barrel if no action is taken to curb output by OPEC and other major producers. Gold for February delivery rose 0.8% on Wednesday on mixed economic data from US and higher oil prices. Analyst predict gold will range trade for a while and consolidate around the $1,200 level and silver above 16.