U.S. durable goods orders announced on Friday fell by 2.1% month-on-month in November, far exceeding market expectations of 1%. It was the first time since February that the decline exceeded 2.0%. The Fed’s preferred inflation measure, the core personal consumption expenditures (PCE) price index excluding food and energy, rose 4.7% year-on-year in November, slower than the 5.0% growth in October, but the growth rate was higher than analysts’ expectations of 4.6%. %.
Core PCE inflation slowed less than expected, weaker consumer spending reflected the impact of high inflation, and durable goods orders brought another sign of an economic slowdown. The commentary said that it is impossible for the Fed to think that the new data is enough for them to change their mind about the terminal interest rate exceeding 5%. Moreover, wage growth remained strong in November. Given that Powell’s speech after raising interest rates last week put wages at the core of fighting inflation next year, the Fed is expected to keep higher interest rates longer.
The three major U.S. stock indexes closed slightly higher. As of the close, the Dow rose 176.44 points, or 0.53%, to 33203.93 points; the Nasdaq rose 21.74 points, or 0.21%, to 10497.86 points; the S&P 500 index rose 22.43 points, or 0.59%, to 3844.82 points.
Among commodities, European natural gas was the biggest loser. Weather forecasts indicate that temperatures in Europe will be above average during the Christmas holidays until early January next year. European natural gas futures fell more than 10% during the session. After five consecutive days of sharp intraday losses, they fell nearly 30% in a week for the first time since early September.
Thanks to Russia’s possible production cuts, international crude oil, which temporarily ended its daily rise on Thursday, continued to rebound, rising by more than 3% during the session. As of Friday’s close, the main contract of WTI crude oil futures rose by US$2.07/barrel, closing at US$79.56/barrel, an increase of 2.67%; the main contract of Brent crude oil futures rose by US$2.94/barrel, closing at US$83.92/barrel, The increase was 3.63%. Russian Deputy Prime Minister and Energy Minister Novak warned on Friday that Russia may cut production by 5% to 7% early next year in response to G7 restrictions on Russian oil prices. Fueled by the optimization and adjustment of China’s anti-epidemic policy, the unexpected drop in U.S. crude oil inventories last week, and Russia’s warning of production cuts, crude oil recorded gains for the second consecutive week.
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