While you were sleeping: Americans confident again

While you were sleeping: Americans confident again

(BusinessDesk) December 24 - Americans are in great spirits heading into the New Year, which is helping underpin the bullish market sentiment among investors.

A private report showed that confidence among U.S. consumers climbed to a six-month high in December. Combined with stronger-than-anticipated Christmas sales and an improving job market consumers are likely to keep spending in 2011.

A separate government report indicated that spending by consumers increased in November for a fifth month.

“We are going to see slow but likely steady improvements in consumer sentiment,” David Semmens, a U.S. economist at Standard Chartered Bank in New York, told Bloomberg News.

“The extension of unemployment benefits and tax cuts mean that 2011 will be a better year for the U.S. consumer.”

As a consequence, the appeal of fixed-income securities declined and U.S. Treasury 10-year notes were on track for their fourth weekly slide.

The 10-year note yield climbed four basis points to 3.39% in mid-morning trading in New York, according to BGCantor Market Data.

The three U.S. stock benchmark indexes were mixed in thin trading ahead of the Christmas holiday. The Dow Jones Industrial Average was up 0.08% at midday . The S&P 500 index slipped 0.15% and the Nasdaq Composite Index fell 0.23%.

The positive outlook for the U.S. economy translated to a rosy outlook elsewhere too.

The MSCI world equity index rose to a two-year high, bringing gains for the year nearly 10%. The Thomson Reuters global stock index also gained, rising 0.1% today.

"The corporate picture still looks very bright, the trend toward higher profits is going to continue and public policies should remain shareholder-friendly," Henk Potts, equity strategist at Barclays Wealth, told Reuters.

"In terms of the macro environment, we would expect most of the economies to keep growing and that is a pretty powerful mix."

Even so, copper futures fell 0.4%, as copper inventories monitored by the London Metal Exchange rose for the ninth day today to the highest in two months, an indication of easing demand. China is the world’s biggest metals user.

Oil was steady above US$90 a barrel, close to the highest level in two years as cold weather bolstered demand, U.S. stockpiles shrank and Russian oil pipeline supplies to Europe were partly halted.

Crude has risen more than 30% from a year-low in May.

U.S. crude for February was steady US$90.44 a barrel by 1311 GMT, after settling at the highest level since October 2008 on Wednesday.

ICE Brent crude slipped seven cents to US$93.58.

Not unexpectedly the euro slid after Fitch downgrade Portugal, reinforcing concerns that Europe has yet to get ahead of the debt curve and that lingering concerns about the euro zone will continue into 2011.

(BusinessDesk)

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