Better US GDP and Higher Oil Prices Spur Stocks
Today's financial recap and tomorrow's financial outlook.
Oil prices surged higher today. In a news report released overnight, unnamed OPEC sources said that they see oil prices rebounding to $70-$80 by the end of next year, but did not see a return to $100 anytime soon. Additionally, Oman said that it is prepared to work with OPEC to cut production to support prices, should oil drop to $40/barrel. However, Iraq approved its 2015 budget today with an average price of $60 oil expected. West-Texas intermediate oil prices rose by 3.55% and retraced all of the prior day's losses.
The final estimate of third quarter GDP in the US was revised up to a 5% quarterly annualized rate from the prior estimate of 3.9%. Economists had expected a gain of 4.2%. The larger revision was due to an uptick in health care spending in the quarter, derived from the Quarterly Services Survey. Treasuries were hard hit on the news as market participants believed this would give the Federal Reserve the cover to start the tightening process at the middle of next year without the fear of starting too early. The 10-year yield rose by 10bps to 2.26%. The report on November personal spending was larger than expected at 0.6% of growth from the prior month, but core prices were unchanged for the report, which dampened some of the positivity.
Tomorrow's Financial Outlook
Tomorrow is Christmas Eve and most market participants will be taking the day off. The only economic report scheduled tomorrow is weekly jobless claims, which will be reported a day early. US equity markets will be open for a full day. They will be closed for Christmas Day on Thursday.
There are similarly very little economic data reports across the rest of the globe and no earnings scheduled for the rest of the week.
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