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Global Market Wrap-Up - December 31, 2012

Monday, December 31, 2012
Mark Hanna
U.S. stocks rallied sharply Monday as lawmakers appeared to agree to kick the can yet again on the fiscal cliff situation. While little to nothing was done in terms of deficit reduction, all the markets care about in the near term is no massive changes overnight, and lawmakers appeared to be headed to a resolution to hold off on any hard decisions until either the debt ceiling fight in a few months or a year from now which is where Democrats want to push the spending cuts sequester. Of course the sequester was supposed to force these two groups to work together this time around, and it did not. The S&P 500 gained 1.7% and NASDAQ 2.0%. For the year the S&P 500 gained 13.4% and the NASDAQ 15.9%.

Oil gained 1.1% to $91.82, gold added 1.2% to $1675.80, and silver advanced 0.8% to $30.23.

British stocks fell 0.5% while French shares gained 0.6%. German markets were closed.

China's Shanghai market gained 1.6% on positive manufacturing data, while Japan's Nikkei was closed.
  • Activity in China's vast manufacturing sector hit its fastest pace in December since May 2011, a survey of private factory managers showed, with a sub-index for new orders pointing to continued strength in the new year. The final reading for the HSBC Purchasing Managers' Index rose to 51.5 in December, well above the preliminary reading of 50.9published in the middle of the month and November's final reading of 50.5.
  • The HSBC PMI rose above 50, the line that demarcates accelerating from slowing growth, in November for the first time in more than a year. A sub-index tracking new orders showed even more room for optimism, rising to 52.9, its highest level since January 2011.