Markets feel the holiday spirit; global stocks rise
Yesterday’s US GDP data has spread a little Christmas cheer around the world so far today. The 5 per cent growth in the last quarter, the fastest pace for 11 years, has further signalled that the US economy is strengthening. Asian markets have closed largely higher with the exception of India and China. Risk-taking is back on the agenda but profit-taking this week has seen the Shanghai index soften. European markets will close early for the Christmas break with most concluding trading by 8am ET. Trading has been positive with the US feel good factor adding to regional gains. US stock futures are trending higher this morning; oil is down; gold is higher.
MBA Purchase Applications 7am ET
Weekly Jobless Claims at 8.30am ET
Bloomberg Consumer Comfort Index at 9.45am ET
EIA Petroleum Status Report at 10.30am ET
Legend International and Prime Global are the only two reporting today.
Dow edges above 18,000 for first time ever
The Dow set yet another record yesterday as the index went above 18,000 for the first time ever. GDP data showing 5 per cent growth in the economy in the last quarter was the catalyst for the new record high. Personal spending was also higher than expected given the low cost of gasoline, rising 0.6 per cent in November and a revised 0.3 per cent in October. The housing market continues to show weakness though with new home sales declining 1.6 per cent in November, following Monday’s data showing that existing home sales had a 6 per cent drop. The dollar was strong yesterday with the index hitting highs not seen since 2006.
Wal-Mart counts the cost of minimum wage hikes
With 21 states implementing rises in the minimum wage from the start of the New Year many businesses are assessing the additional payroll costs or finding ways to absorb it. In the case of Wal-Mart, the largest private employer in the US, it is restructuring base salaries to reduce the impact. A memo seen by Reuters shows that as lower paid workers get the increased hourly rates, those higher up will see wages squeezed to help mitigate the extra cost. The biggest hike in the minimum wage is in South Dakota, where there will be a 17 per cent increase.
Airbag firm president steps down
Takata’s president Stefan Stocker is stepping down from his role at the airbag manufacturer to unify the company’s response to the recall of millions of airbags. Stocker will remain as a board member but will be replaced as president by the chairman Shigehisa Takada. The faulty airbags have been linked with 5 deaths and resulted in the recall of 24 million vehicles worldwide.