All markets gain for second time this year on recovery signs

Striking Deal

Sentiment improved after Obama said Nov. 18 that he was confident of striking a deal with Republican Congressional leaders. Signs of a stalemate in the talks sent the Dollar Index to a one-month low today.

In televised interviews broadcast over the weekend, U.S. Treasury Secretary Timothy F. Geithner and House Speaker John Boehner blamed each other for the standoff. The Dollar Index slid as much as 0.3 percent to 79.942, the least since Oct. 31.

Two-thirds of the 862 analysts surveyed in the Bloomberg Global Poll described the world economy as either stable or improving last month, the largest proportion since May 2011 and up from just over half in September.

Base metals were four of the top five performers on the GSCI index last month, with aluminum rising 10 percent. Zinc was second, with a 9.7 percent gain. Soybeans and natural gas were the biggest losers, dropping 7.1 percent and 6.9 percent, respectively. The GSCI is up 0.7 percent in 2012.

European Rally

West Texas Intermediate oil advanced 3.1 percent on the New York Mercantile Exchange, leaving it $22.32 below Brent on the ICE Futures Europe exchange, $5.56 short of the widest spread ever. WTI has slipped 10 percent this year. Brent has risen 3.6 percent.

WTI may recover 13 percent in 2013, according to the median of 33 analyst forecasts compiled by Bloomberg. Copper may be little changed, a separate survey of 23 analysts showed.

The Stoxx Europe 600 Index rose 2.2 percent last month, bringing its advance this year to 17 percent. It was the sixth straight month of gains, its longest rally since 2006. The S&P 500 climbed 0.6 percent, extending its increase in 2012 to 15 percent. The MSCI Asia Pacific Index added 2.4 percent, bringing its growth this year to 13 percent.

The U.S. equity benchmark will fall 1.2 percent to 1,399 by the end of the year, according to the average of 14 Wall Street strategists tracked by Bloomberg. It will recover 11 percent in 2013, the average of eight forecasts showed.

Equities as measured by the Stoxx 600 slid to the lowest in more than two months on Nov. 15 after the European Union’s statistics office in Luxembourg said gross domestic product in the 17-nation currency bloc slipped 0.1 percent in the third quarter, after a 0.2 percent drop in the previous three months.

Corporate Earnings

Fourth-quarter earnings at Standard & Poor’s 500 Index companies will grow 3.9 percent, according to analysts’ estimates compiled by Bloomberg. Excluding financial companies, profits will grow 0.8 percent, the data showed.

The dollar strengthened 3.4 percent against the yen in November, partly as Shinzo Abe, the front-runner to become Japan’s next prime minister, called for unlimited stimulus. Japan’s cabinet approved 880 billion yen ($10.7 billion) of additional stimulus on Nov. 30.

“The U.S. economy is better than people expected,” said Hiroki Shimazu, an economist in Tokyo at SMBC Nikko Securities Inc., a unit of Japan’s third-largest publicly traded bank by assets. “In Japan, the central bank would have to print a lot of money, and the yen will weaken. I don’t think the decline is over.”

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