A shortened trading week did not prevent markets from maintaining a bullish trend. Equities rose this week as economic data out of the U.S. supported growth and commentary from Europe points to sovereign bond purchases in early 2015.
The energy sector took a big blow this week, falling nearly 10% in light of OPEC’s decision to leave production levels steady. Despite efforts led by Venezuela to persuade members to cut production, the cartel agreed to leave supply as is and reevaluate in the near future. Crude prices fell over 5% despite data confirming that OPEC pumped less crude in November than anticipated.
U.S. GDP data released on Tuesday surprised to the upside as Q3 growth was reported as a 3.9% expansion. Other pieces of economic data were not as exuberant but still point to the U.S. as being the strongest member of the global economy.
Prices of gasoline reached a 4 year low in the U.S. according to reports. Congress is holding a debate in the House as to whether or not the nation should fully lift its ban on exporting crude oil.
A Vice President of the ECB articulated that sovereign bond purchases from the central bank would likely occur in the first quarter of 2015.
U.S. Treasury yields broke out of a recent trading range despite solid metrics reported this week. Yields are at their lowest levels since the October 15 volatility.
Gold has recovered off of its recent lows but did fall this week given the progress of the American economy. India scrapped a ban on importing gold. The ban had helped the Asian economy narrow its current account deficit.
The Federal Reserve has announced a full review of its regulatory practices. The Fed’s credibility as a regulator has been severely questioned since the crisis but criticism has mounted in recent weeks after published accounts of failing to properly rein in financial institutions. Regulators have caught the ire of Congress during recent testimony, capped by NY Fed President Dudley’s questioning.