Aussie stocks slid to session lows this afternoon even as other markets in Asia Pacific were rising and as oil hit fresh session highs after Friday’s drubbing. Energy stocks built on morning declines, with that sector ending down 2.5%. The ASX 200 fell 0.8% to 5671.6, easily the region’s worst performer so far today, as the materials sector also skidded 2.5% amid slumping iron-ore futures in China. That group of stocks hit 13-month lows today. Also falling at least 1% was telecom and health care. But REITs rose 0.8%.
U.S. stocks rebounded intraday, led by shares of retailers as shoppers spent billions of dollars online and in stores over the Thanksgiving weekend, commencing what is expected to be one of the strongest holiday seasons in years. The rise provided some respite for major indexes after a turbulent week for stocks, when a plunge in oil prices, the prospect of an economic slowdown and global trade tensions rattled markets. The S&P 500 rose 0.8% in recent trading, while the Dow Jones Industrial Average added 200 points, or 0.8%, to 24486. The Nasdaq Composite rose 1.1%. All three indexes remain down more than 2% in November. Among the biggest gainers was Amazon.com, which is expected to account for nearly a fifth of holiday sales this year. The online retailer’s stock rose 3.3% in recent trading. Other retailers also gained, with Target up 1.8%, Macy’s rising 0.7% and Kohl’s adding 1.5%. The SPDR S&P Retail ETF climbed 0.9%. Retailers are expected to get another boost Monday, as many are offering online promotions as part of “Cyber Monday.” Also helping to buoy stocks was a bounce back in the price of oil, which has been battered in recent weeks. U.S.-traded crude oil rose 2.9% to $51.90 a barrel Monday, making up some of last week’s slump, the largest one-week decline since January 2016. Crude oil has fallen more than 20% so far this month, and on Friday settled at its lowest level in more than a year on concerns of global oversupply.
Gold prices gave up earlier gains to settle slightly lower, with strength in global stock markets dulling investment demand for the precious metal.
IRON ORE: 63.88 – 3.63 (December contract)
Oil settled higher, with U.S. prices posting their biggest one-day rise in eight weeks-just after suffering their worst session percentage loss in three years. Talk of a meeting of Russian and Saudi oil members this week was driving speculation of an early agreement to cut production, ahead of the much-anticipated Dec. 6 meeting of the Organization of the Petroleum Exporting Countries. January West Texas Intermediate crude rose $1.21, or 2.4%, to settle at $51.63 a barrel on the New York Mercantile Exchange. That was the biggest percentage and dollar gain since Oct. 1, according to Dow Jones Market Data. In a holiday-shortened session on Friday, the contract plunged 7.7% to settle at $50.42 a barrel, marking the worst percentage loss since July 6, 2015 and the lowest settlement since Oct. 9, 2017. It also marked the seventh-straight weekly drop a fall of 10.6%. Global benchmark January Brent also rebounded Monday, up $1.68, or 2.9%, to $60.48 a barrel on ICE Futures Europe, after closing down 6.1%, to $58.80 a barrel on Friday. Brent lost nearly 12% during the week. Leaders from Saudi Arabia and Russia are scheduled to attend the Group of 20 gathering in Argentina later this week, according to Bloomberg News, which also reported that Saudi output has climbed to 11.2 million barrels a day from 10.8 to 10.9 million barrels earlier this month.
The Mexican peso fell to its lowest level against the dollar in nearly a year-and-half intraday, after President Donald Trump threatened to shut down the southwestern U.S. border. The dollar was recently up 0.9% at 20.59, its highest level against the peso since June 2018. In a tweet Monday morning, Mr. Trump threatened a border closure if Mexico didn’t send migrants seeking to enter the U.S. back to their own countries. Closing border crossings for a lengthy amount of time would be a rare move that would risk disrupting commerce and upending the lives of hundreds of thousands of people in the U.S. and Mexico. Monday’s drop is the latest setback for the Mexican peso, which has also been pressured by investor worries over how president-elect Andrés Manuel López Obrador will manage the economy when he takes office next month. Many were spooked when the leftist nationalist recently canceled the construction of a $13.3 billion Mexico City airport that was one-third complete. The dollar also rose 1.4% against the Russian ruble, after Russia’s coast guard opened fire on Ukrainian naval vessels Sunday, sparking a fresh escalation of tension between the two countries. In developed markets, the euro fell 0.1% to $1.1330. The dollar rose 0.5% against the Japane yen, to Y113.55. The WSJ Dollar Index, which measures the U.S. currency against a basket of 16 others, was up 0.1% at 90.55.
The Stoxx Europe 600 closed 1.2%, or 4.35 points ahead at 358.33 as tensions about the budget standoff between Brussels and Rome eased. The DAX ended the session 1.45% up, the CAC-40 climbed 1.0% and the FTSE MIB rose 2.8%. “The Italian situation has improved a little as now there are reports that the administration in Rome is open to the idea of running a smaller budget deficit than planned,” said David Madden at CMC Markets. Italian banks responded positively, with the sector’s top riser, Unione di Banche Italiane, gaining 6.4%.
In Asia, Japan’s Nikkei Stock Average was up 0.8%, while South Korea’s Kospi benchmark gained 1.2% and Hong Kong’s Hang Seng was up 1.7%. Markets are also eyeing U.S.-China trade relations ahead of a Group of 20 summit in Argentina at the end of the week. Any deterioration in relations could weigh on markets further by threatening global growth, analysts say. The U.S. already plans to increase tariffs on $200 billion of Chinese imports to 25% in January, unless some agreement is made.