NEW YORK, Jan 12 (Reuters) The price of oil increased on Friday after a few oil tankers rerouted their course away out of to the Red Sea after overnight strikes by the U.S. and Britain on Houthi targets in Yemen as U.S. Treasury yields eased due to reports of U.S. producer prices unexpectedly decreased in December.
Wall Street stocks ended the day nearly flat, after bouncing between small gains and losses throughout the trading session. U.S. earnings season unofficially started with major U.S. banks reporting lower profits on Friday, in the first quarter of the year. affected by special charges, jobs cuts, and evidence that some consumer loans are beginning to go downhill.
Advertisment Scroll down to read
While its profit for the quarter declined, JPMorgan Chase (JPM.N) reported its greatest annual profit ever and is forecasting higher-than-expected annual dividends for 2024. JPMorgan Chase’s shares dropped 0.7 percent, and the S&P 500 index of banks (.SPXBK) dropped 1.3 0.3%.
American as well as British warplanes and submarines have launched numerous attacks from the air across Yemen over the course of a night in retaliation for Iran-backed Houthi forces over attacks on Red Sea shipping. This move intensified an ongoing conflict arising from Israel’s conflict in Gaza.
Brent crude futures climbed to 88 cents, which is 1.1 percent, and settled at $78.29 per barrel. The session’s high was higher than $80, the highest level this year to date. U.S. West Texas Intermediate crude futures rose up 66 cents, which is 0.9 percent, before closing at $72.68 and paring gains after reaching a high of $75.25.
A recent report on U.S. PPI numbers have raised the possibility for an imminent U.S. reduction in interest rates by the Federal Reserve. The index of producer prices for the final demand decreased by 0.1 percent last month because the price of goods fell, whereas prices for services remained steady which suggests lower inflation in the coming months to come.
Report this advertisement
The data released on Thursday revealed U.S. consumer prices increased more than anticipated in December.
“Markets are ignoring yesterday’s CPI report, as the overall inflation rate is rising and the Fed could legitimately look at cutting rates in the coming season,” Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina, wrote. “The inflation pipe is dripping and consumer prices are expected to gradually reach the Fed’s target of 2.”
Inflation gauges
U.S. two-year Treasury yields decreased to their lowest levels since May, at 4.119 percent following the release of PPI data. They fell last week by 11.8 basis points (bps) at 4.142 percent. The two-year yields, which are a reflection of expectations of rate moves, were in decline of 13.1 bps, their lowest weekly performance in a month.
“1/2″The German share price index DAX graph is depicted on the exchange of shares at Frankfurt, Germany, January 11 2024. REUTERS/Staff/File photo Gain Licensing Rights
The 10-year yield of the benchmark sank to a one-week low of 3.916 percent, and then last seen at 3.955 percent, which was down 1.7 percent.
It appears that the U.S. rate futures market has estimated a close to 80 percent likelihood of a rate cut during the Federal Reserve’s policy session, an increase from 71% on Thursday, as per the rate probability calculator of LSEG.
The Dow Jones Industrial Average (.DJI) fell 118.04 points which is 0.31 percent in the last 24 hours, bringing it to 37,592.98. Its benchmark, the S&P 500 (.SPX) gained 3.59 points which is 0.08 percent, and was at 4,783.83 as did the Nasdaq Composite (.IXIC) gained 2.58 points which is 0.02 percent in value, to 14,972.76.
In the week that was reported, the S&P 500 gained 1.84 percent, the biggest weekly percentage increase since mid-December.
It is expected that the U.S. market will be closed on Monday due to the Martin Luther King Jr. holiday. Martin Luther King Jr. holiday.
Europe’s pan-European STOXX 600 index (.STOXX) rose 0.84% and MSCI’s gauge of stock prices all over the world (.MIWD00000PUS) gained 0.33 percent.
European Central Bank (ECB) President Christine Lagarde said rates could be reduced when the central bank is certain that inflation had dropped to 2%, which is the target.
The dollar index slowed gains following an update to PPI data. The index for the dollar was last up 0.19 percent at 102.40.
Bitcoin has been trading at $43,643 since last week, less than 5%. It increased to a record high of $49,051 last Thursday following that the U.S. Securities and Exchange Commission late Wednesday night approved exchange-traded funds that are linked to bitcoin.
In Taiwan, hundreds of thousands took part in last pre-election rallies across Taiwan in advance of the crucial presidential and parliamentary election.
Reported by Caroline Valetkevitch Additional reportage from Amanda Cooper in London, Stella Qiu in Sydney and Rae Wee in Singapore; Editing by Richard Chang, Will Dunham and Marguerita Choy
