US stocks closed in the red on Monday as energy and materials stocks slumped after oil prices closed at lowest levels in nearly seven years. The Dow Jones Industrial Average slid 0.7% and the Nasdaq Composite fell 0.8%. The S&P 500 closed 0.7% lower. Falling oil prices weighed on energy stocks as S&P 500 energy sector tumbled 3.6% with Exxon (N:XOM) and Chevron (N:CVX) declining almost 3%. Airlines advanced helped by lower oil prices, JetBlue Airways Corporation (O:JBLU) and Delta Airlines (N:DAL) posted the biggest gains around 4%. The dollar strengthened as euro retreated and commodity currencies fell dragged by falling oil prices. Live dollar index data showed ICE US Dollar index, a measure of the dollar’s strength against a basket of six currencies, rose 0.3%. After Friday's November jobs report indicated labor market continued tightening as the private sector added 211000 new jobs, above the 200000 level considered consistent with strong labor market, investors are pricing in 79% probability the Federal Reserve will hike interest rates at its December meeting, according to the CME Group’s FedWatch tool. On Monday Atlanta Fed President Dennis Lockhart confirmed his support for raising rates, and St. Louis Fed President James Bullard said that Fed forecasts, which kept the central bank from raising rates earlier, have been wrong over the last 18 months. Today at 12:00 CET National Federation of Independent Business November small business index will be released in US. The tentative outlook is positive for the dollar. At 16:00 CET October Job Openings and Labor Turnover Summary will be published. The tentative outlook is positive.
European stocks posted marginal gains on Monday as falling oil prices weighed on energy shares. Stocks were helped by a weaker euro which retreated after the strong November US jobs report boosted the dollar by increasing the likelihood of interest rate hike in December, making the European products cheaper and more competitive in export markets. The FTSEurofirst 300 index closed up 0.4 %. Repsol (MC:REP), Royal Dutch Shell (L:RDSa), BP (L:BP) and Statoil ASA (L:0M2Z) recorded losses between 2.9% and 5.6%. Electrolux sank 13.4% after its agreement to buy General Electric’s appliance business for $3.3 billion was terminated by General Electric (N:GE). Airbus was among the top gainers recording nearly 3% gain after reporting orders for more than 1,000 planes. At 11:00 CET today third quarter revised GDP will be released in euro-zone. The tentative outlook is neutral. At 16:00 CET the National Institute of Economic and Social Research will release UK GDP data for the previous 3 months. And tomorrow at 08:00 CET October Trade Balance will be released in Germany. The tentative outlook is negative.
Nikkei 225 fell today 1% as falling energy and commodity shares dragged the market benchmark down despite the data which showed Japan’s economy avoided recession as third quarter GDP grew 1.0% from the second quarter compared with the previous estimate of a 0.8% contraction.
Asian stocks hit three-week lows as a slump in oil market dragged energy shares down and data showed China's imports dropped for the 13th consecutive month with a 8.7% fall in November year-over-year.
Oil prices are edging up today after data indicated China’s November crude oil imports grew 7.6% year-over-year. Oil futures prices tumbled on Monday to seven-year lows with January Brent crude closing 5.28% lower at $40.73 a barrel on London’s ICE futures exchange on concerns of further supply growth by OPEC as Iran starts ramping up its exports.