Crude Tumbles as U.S. Supply Surges Amid Output, Import Gains

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Oil tumbled after U.S. crude inventories climbed to the highest level for this time of year since 1930.

Crude supplies rose to 490.7 million barrels, leaving stockpiles more than 120 million barrels above the five-year seasonal average, government data showed. The discount of crude in New York to global marker Brent earlier dropped to an 11-month low amid expectations that a 40-year-old ban on most American crude exports will be lifted. Futures maintained losses after the Federal Reserve raised interest rates for the first time in almost a decade in a widely telegraphed move.

West Texas Intermediate oil for January delivery dropped $1.30, or 3.5 percent, to $36.05 a barrel at 2:02 p.m. on the New York Mercantile Exchange. The U.S. benchmark slid below $35 a barrel Monday for the first time since February 2009. The volume of all futures traded was 29 percent above the 100-day average.

Brent for January delivery, which expires today, fell $1.14, or 3 percent, to $37.31 a barrel on the London-based ICE Futures Europe exchange. The more-active February contract settlement slid 2.8 percent to $37.56.

WTI futures for January were $1.26 a barrel below Brent after earlier shrinking to as little as 20 cents, the smallest discount in a year. The WTI February contract earlier traded at a premium to the international benchmark for the first time in five years.

Source : Bloomberg

Gold, Metals Gain After Policy Makers Raise U.S. Interest Rates

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Gold maintained gains after the Federal Reserve boosted U.S. interest rates for the first time since 2006 while signaling that the pace of subsequent increases will be “gradual.” Silver and copper also held on to earlier increases.

The Federal Open Market Committee unanimously voted to set the new target range for the federal funds rate at 0.25 percent to 0.5 percent, up from zero to 0.25 percent.

Most metals are headed for an annual loss as signs of a strengthening U.S. labor market boosted speculation that the Fed would tighten monetary policy. Higher rates cut the appeal of metals, which don’t pay interest like competing assets. With gold trading near the cheapest since 2010 and copper close to a six-year low, some traders say prices may be near a bottom as the focus shifts to the timing of the next rate increase.

Gold for immediate delivery climbed 0.8 percent to $1,069.30 an ounce at 2:06 p.m. in New York.

Copper futures for March delivery advanced 0.6 percent to $2.0695 a pound on the Comex in New York in electronic trading.

Gold dropped seven of the past eight weeks and copper last month slid to the lowest in six years as improving economic data boosted the U.S. dollar, curbing the appeal of metals as alternative assets.

The Philadelphia Stock Exchange Gold and Silver Index of 30 producers climbed 2.7 percent. A gauge of 18 base-metals companies tracked by Bloomberg Intelligence rose 1.8 percent.

Source: Bloomberg

U.S. Stocks Rally Amid First Fed Interest-Rate Boost Since 2006

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U.S. stocks rallied as the Federal Reserve ended seven years of near-zero interest rates, and assured investors that the world’s largest economy is resilient enough to withstand future increases in borrowing costs at a gradual pace.

Equities extended gains following the central bank’s move, pushing the Standard & Poor’s 500 Index’s biggest three-day rally since Oct. 5 as the benchmark rebounded from its worst weekly drop since August. Gains were widespread with nine of the gauge’s 10 main industries rising more than 1 percent as Fed Chair Janet Yellen expressed confidence in the economic outlook.

The S&P 500 jumped 1.5 percent to 2,072.98 at 4 p.m. in New York, rising for three consecutive days for the first time since October while erasing losses for the year. The benchmark surged above its average prices during the past 50 and 200 days.

While policy makers have decided the economy is ready for higher borrowing costs, they continue to stress that progress in economic data will dictate the ultimate course. A report today showed new-home construction rebounded in November, led by gains in single-family dwellings. Work began on the most stand-alone houses since January 2008, and permits for similar projects reached an eight-year high.

A separate gauge showed manufacturing stagnated last month, held back by less production of durable goods such as automobiles and metals that reflects weak global demand.

Source: Bloomberg

European Stocks Rise, Paring Gains in Countdown to Fed Decision

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Investors pushed European stocks higher for a second day before the Federal Reserve’s much-awaited interest-rate decision, though equities pared gains in the last hour of trading.

The Stoxx Europe 600 Index climbed 0.2 percent at the close of trading in London, trimming an advance of as much as 1 percent. Anglo American Plc led an advance in miners, up for the first time in 12 days. Energy producers, leading the rally earlier, ended little changed as oil slipped.

Among stocks moving on corporate news, Casino Guichard-Perrachon SA rallied 6.5 percent after saying it will sell assets to cut debt by more than 2 billion euros ($2.2 billion) next year. Rolls-Royce Holdings Plc advanced 4.9 percent after announcing a management shakeup. Vestas Wind Systems A/S climbed 4.3 percent as U.S. Congress is set to vote on a bill that would extend renewable-energy credits. Altice NV surged a record 13 percent, after reaching its lowest price since April 2014 on Monday, as Deutsche Bank AG recommended buying the shares.

Dialog Semiconductor Plc lost 4.8 percent after cutting its fourth-quarter revenue forecast, and peer ASM International NV dropped 4.6 percent. Zodiac Aerospace fell 3.7 percent after reporting a decline in quarterly sales.

Source: Bloomberg

U.S. Stocks Edge Higher for Third Day Before Fed Rate Decision

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U.S. stocks climbed for a third day as investors await what is widely expected to be the first Federal Reserve interest-rate increase in almost a decade.

Leadership shifted Wednesday as crude oil retreated and energy slumped after two sessions out in front. Industrials paced early gains, with Honeywell International Inc. up 4.5 percent after its 2016 earnings forecast beat some analysts’ estimates. Homebuilders rose after housing starts were stronger than forecasts. Equities earlier trimmed their climb as crude extended a drop after weekly inventory data showed stockpiles remain ample.

The Standard & Poor’s 500 Index gained 0.2 percent to 2,047.55 at 11:48 a.m. in New York, after rising as much as 0.8 percent. The gauge’s advance faltered near its average price during the past 50 days. The Dow Jones Industrial Average climbed 16.46 points, or 0.1 percent, to 17,541.37. The Nasdaq Composite Index rose 0.2 percent. West Texas Intermediate crude futures lost 4.4 percent after rising almost 5 percent during the two prior sessions.

The Federal Open Market Committee is poised to boost rates today for the first time since 2006, ending a campaign of stimulus that helped stoke what could become the second-longest American rally on record next year. Fed officials will announce their rate decision at 2 p.m. in Washington, and traders are pricing in a 76 percent chance of liftoff.

Barring a shock decision, investors are about to find out how much stocks are worth in the absence of Fed support that has helped restore $15 trillion to share values since 2009. History suggests two immediate consequences from tightening: higher volatility and lower valuations, meaning earnings and ultimately the economy are left to drive prices.

The S&P 500 fell in seven of eight sessions, losing 5.7 percent after the Fed balked at raising rates in September, citing a threat to global growth amid a slowdown in China and turmoil in financial markets. By mid October, traders priced in less than 30 percent chance of a rate increase this year while equities headed for their strongest monthly gain since 2011. Odds jumped to nearly 70 percent after a stronger-than-forecast October jobs report on Nov. 6.

A report today showed new-home construction rebounded in November, led by gains in single-family dwellings that signal the residential real estate industry will continue to support growth. Work began on the most stand-alone houses since January 2008, and permits for similar projects reached an eight-year high. A separate gauge showed manufacturing stagnated in last month, held back by less production of durable goods such as automobiles and metals that reflects weak global demand.

The S&P 500 capped its first back-to-back gains in more than a month yesterday. Prospects for the first U.S. rate increase and a deepening oil rout had sparked a selloff in riskier assets, putting the benchmark on track for its worst December in 13 years. The equity gauge has slipped 3.9 percent since a May record, and is poised for its biggest annual drop since 2008.

The Chicago Board Options Exchange Volatility Index, fell 4 percent Wednesday to 20.12, extending its decline this week to almost 18 percent. The measure of market turbulence known as the VIX surged 65 percent last week, the most since a record monthly jump in August.

Seven of the S&P 500’s 10 main industries rose, with utilities up 1.7 percent and phone companies rising 1.3 percent. Energy, materials and technology shares lagged.

Source : Bloomnberg