The rally in stocks continued early this week, the cautious voices of Fed naysayers drowned out by bull euphoria for the time being. The Dow Jones, still resting on its laurels from breaking its all-time high last week, was completely flat on Monday but subsequently closed 0.68% higher the next day. The S&P 500 edged ever closer to its own all-time high, gaining 0.45% and 0.59% the previous two sessions to close at 4768 points. A reminder that its highest ever close sits just up the road at 4796. The Nasdaq Composite too put in a double shift to close 0.61% and 0.66% higher over the past two sessions.
The Nikkei 225 also fared well on Tuesday, gaining 1.41% on the day following comments from Kazuo Ueda stating that the Bank of Japan “will patiently continue with monetary easing”. The statement flew in the face of traders anticipating a quick shift to monetary tightening early next year and sent USDJPY 0.75% higher during Tuesday’s session. We mentioned back on the 8th of December that the surge in the Japanese Yen was somewhat difficult to justify, traders perhaps misinterpreting the intentions of various BoJ board members.
New geopolitical concerns in the Middle East fuelled a rise in the price of oil this week. Tensions in the Red Sea grew after a Norwegian-owned vessel was targeted by pirates, leading several major shippers to halt trade through the Suez Canal. Brent crude gained on Monday and Tuesday to reach $79 a barrel, up from lows of $72 just one week ago. WTI closed above $74 by yesterday’s close. Despite such concerns, the fact remains that there is still an abundance of oil supply relative to demand.
