STOCKS TANK, OIL PLUNGES, BONDS SURGE: Here's What You Need To Know
First, the scoreboard:
- Dow: 17,287.7, -309 (-1.7%)
- S&P 500: 2,002.4, -32.9 (-1.6%)
- Nasdaq: 4,653.6, -54.5 (-1.1%)
And now, the top stories on Friday:
1. Oil was the big story again on Friday. West Texas Intermediate crude oil futures fell below $58 a barrel for the first time since May 2009 as crude oil continues to tumble. After starting the week at around $65 a barrel, WTI fell more than $7 over the course of the week. Brent crude oil, the international benchmark, also made new lows, falling below $62 a barrel.
2. As oil sold off and stocks fell, US Treasury bonds, seen as one of the safest investments an investor can make, continued to rally, with long-date bonds the big winners. The yield on the 10-year Treasury bond fell below 2.1% on Friday and settled at a new low of 2.08% for the year. The 30-year bond also rallied, falling to 2.74%, the lowest yield in over two years.
3. Bond yields around the world are falling, with German bond yields going negative for durations out to four years and the 10-year bund making a new record low of 0.623% on Friday.
4. On Friday, the University of Michigan's preliminary reading on consumer confidence for the month of December came in at a nearly eight-year high of 93.8, blowing away expectations for an 89.5 reading. Following the report, Paul Dales at Capital Economics said that coupled with Thursday's better-than-expected retail sales report, the holiday shopping season looks like it could be the strongest in nine years. Deutsche Bank's Torsten Slok also circulated a chart showing that those in the lowest third of household incomes had the biggest rise in confidence this month, bolstering prospects for a strong holiday season.
5. Producer prices in November fell more than expected, declining 0.2% against expectations for a 0.1% decline. According to the Bureau of Labor Statistics, 60% of the decline in prices for final demand goods can be attributed to the index for gasoline, which dropped 6.3%.
6. In Federal Reserve news, noted dove Narayana Kocherlakota announced that he will stepping down from his post as president of the Minneapolis Federal Reserve in 2016. Kocherlakota has recently been a dissenter at Federal Open Market Committee meetings, urging the FOMC to favor a more accommodative policy than it has currently pursued. The Fed will hold its last meeting of the year next week, making its final monetary policy announcement of 2014 on Wednesday.
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