The dollar appreciated 0.7% to 116.57 yen at 9:34 a.m. in New York. The yield on 10-year Treasuries jumped 3 basis points to 2.37%. Gold slid 0.8%. The Standard & Poor’s 500 Index (CME:SPZ14) was little changed and the Stoxx Europe 600 Index slipped 0.1%. The ruble headed for its 10th weekly decline. Brent crude (NYMEX:SCZ14) rose for the first time in a week.
Retail sales increased in October as American consumers ate out and shopped for clothes, enjoying a windfall from cheaper gasoline. The euro-area economy grew faster than analysts forecast in the third quarter as Germany and France rebounded and Greece showed some signs of revival. The world economy is in its worst shape in two years, according to a Bloomberg Global Poll of investors.
“As we move closer to the end of the year people are looking for a holiday rally and may be asking if it’s happened already,” Robert Pavlik, who helps oversee $4.5 billion as chief market strategist at Banyan Partners LLC in New York, said by phone. “The small retail beat isn’t going to do it. We’re going to see a little pause. We can’t continue to climb up this ladder forever.”
U.S. retail sales in October increased 0.3% after a 0.3% drop in September. The median forecast in a Bloomberg survey of 86 economists projected a 0.2% advance. Eleven of 13 major categories showed gains, indicating broad-based growth.
The S&P 500 rallied 9.5% from a six-month low in October to a record on Nov. 11 as better-than-estimated corporate earnings and economic data boosted confidence the U.S. economy can withstand a global slowdown as the Federal Reserve ended its bond-buying program.
The dollar climbed against 12 of its 16 major peers. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 of its most-traded peers, rose 0.4%.
The MSCI Emerging Markets Index lost 0.5%, leaving the gauge little changed on the week. Brazil’s Ibovespa slid 1.4%, extending yesterday’s 2.1% drop.
The ruble weakened 1% to 47.3015 per dollar, extending its decline for the five-day period to 1.4%. Russia’s currency has dropped for 10 weeks, the longest slump since 2005.
Credit-default swaps insuring Russian government debt rose 14 basis points to 296 basis points, the highest since November 2011, according to data compiled by Bloomberg. The contracts have increased for all but one of the past 11 days, the data show.
Brent crude climbed 2.2% to $79.16 amid speculation that the drop in prices below $80 a barrel increases the likelihood that OPEC will cut production. West Texas Intermediate (NYMEX:CLZ14) added 0.8% to $74.80.
OPEC producers have stepped up their diplomatic visits before the group’s meeting in two weeks, potentially seeking a consensus on how to react to oil prices that have plunged to a four-year low. Prices could slide further in the coming months as the market enters a period of weaker demand, the International Energy Agency said today.
Futures on the Hang Seng China Enterprises Index rose 1.5% after the official close of Hong Kong’s stock exchange and contracts on the Hang Seng Index climbed 0.9%.
Chinese individuals who buy Hong Kong equities through the link get a three-year exemption, while mainland companies using the connect will be charged tax, the Ministry of Finance said in a statement today, clarifying its rules three days before the program’s debut.
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