The Wall Street bull statue is pictured in the Manhattan Borough of New York.
Carlo Allegri | Reuters
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What you need to know today
Markets extend streak
U.S. markets mostly rose Monday, raising hopes major indexes could extend their winning streak to an eighth straight week. Asia-Pacific markets were mixed Tuesday, with Japan’s Nikkei 225 climbing around 0.8% while Hong Kong’s Hang Seng Index fell 0.61%, leading losses in the region.
BOJ maintains rates
In a unanimous decision, the Bank of Japan kept its interest rates at -0.1% and retained its yield curve control policy, which keeps the upper limit for 10-year Japanese government bond yield at 1% as a reference. BOJ said in a statement that “extremely high uncertainties” motivated it to stick with its easy monetary policy.
Shipping supply snarls
Amid a series of attacks on vessels by Houthi militants from Yemen, BP’s the latest firm to halt shipment across the Suez Canal. BP joins shipping giants MSC, Hapag-Lloyd, CMA CGM and Maersk in suspending travel through the Red Sea. Those stoppages raised concerns of a disruption to the global supply chain — avoiding the Suez Canal adds up to 14 days to a shipping route. Oil prices were mixed.
Apple stops watch sales
Apple will pause U.S. sales of its Apple Watch Series 9 and Apple Watch Ultra 2 — its latest watch models — in its online stores starting Thursday, and in-person after Sunday. The decision comes after an intellectual property dispute between Apple and Masimo, a medical technology company, over the watches’ Blood Oxygen feature.
[PRO] ‘Boring’ tech stocks
Artificial intelligence stocks have dominated markets this year. But their valuations are forebodingly high. Meanwhile, non-artificial intelligence technology stocks that have struggled in 2023 could have significant upside next year, according to Morgan Stanley. The bank picked 14 of its favorite “boring stocks” that it sees as having potential to pop.
The bottom line
There’s no stopping the market. Fresh off seven straight weeks of gains, major indexes mostly rose Monday as they attempted to maintain their momentum.
History is on the side of markets. Of the 20 times since 1964 the S&P 500 has had seven weeks of gains, the index extended the rally to the eighth week 12 times, noted Chris Larkin, managing director at E-Trade from Morgan Stanley.
The S&P 500 gained 0.45% to close at 4,740.56, putting it just 1.2% away from its all-time closing high at 4,796.56 in January 2022. The Nasdaq Composite climbed 0.61%, its eighth positive session in a row. The Dow Jones Industrial Average remained unchanged — well, if we want to split hairs, technically the index gained 0.002%, furthering its streak and record close.
Some stock movements of note: Meta popped almost 3% and is up 186% year to date, on pace for its best year ever. U.S. Steel shares surged 26.09% after Japan’s Nippon Steel agreed to buy the company for $14.9 billion in cash, but Japan-listed shares of Nippon Steel fell around 3.5% Tuesday.
Adding to market cheer is Goldman Sachs’ optimistic forecast for the pace of rate cuts next year. “We see the committee delivering at least three back-to-back 25bp cuts, probably in March, May, and June,” Jan Hatzius, chief economist at Goldman Sachs, said in a note to clients.
But Chicago Federal Reserve President Austan Goolsbee’s confused by market reaction to the Fed meeting last week. “It’s not what you say, or what the chair says. It’s what did they hear, and what did they want to hear,” Goolsbee said on CNBC’s “Squawk Box.”
“I was confused a bit — was the market just imputing, here’s what we want them to be saying?”
It’s undeniable markets have a mind of their own and can, at times, seem disconnected from reality — or even create their own reality. But with such strong momentum, “the burden of proof is absolutely on the bears here,” as Jeff deGraaf, the CEO and chairman of Renaissance Macro, put it.
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