Stocks rallied on Tuesday, paring back some of their losses from Monday as the Dow powered to yet another record high.
First, the scoreboard:
- Dow: 17,879.5, +102.7, (+0.6%)
- S&P 500: 2,066.5, +13.1, (+0.6%)
- Nasdaq: 4,755.8, +28.5, (+0.6%)
And now, the top stories on Tuesday:
1. The biggest economic data report on Tuesday was construction spending data, which showed spending jumped 1.1% in October, more than the 0.6% increase that was forecast. Following the report, Ian Shepherdson at Pantheon Macro said in a note to clients that, “In one line: Better, at last, but could just be noise… This is the first clear increase in construction spending since May, though as always remember that these numbers are subject to often-large revisions. Still, the October details show a broad-based gain, with solid increases in both the public and private sectors, though all the 0.6% increase in the private sector was in the residential component, where new housing construction jumped 1.7%; by contrast, non-res spending dipped a tenth.”
2. Oil prices were still volatile on Tuesday, with crude falling a bit after a big rally on Monday off of the weekend lows, settling around $US67.25 a barrel. And while many have attributed the decline in prices, Ed Yardeni wrote on Tuesday that perhaps the global economy is simply weaker than currently recognised.
3. And while the price of oil has been falling, stocks have held up well, as the Dow hit a new record on Tuesday and the S&P 500 is just 6 points its all-time high. And in an afternoon email on Tuesday, NYSE floor governor Rich Barry gave five reasons why some traders on the floor are so bullish about 2015. In short, the third year of a presidential term is usually a winner, and especially when it’s a second-term president. And if stocks hold on for their third straight year of double-digit gains, they will be fighting history not to go higher next year, as no time in the last 84 years have stocks declined after three straight years of double-digit gains.
4. On Tuesday, Russia’s economy ministry downgraded its 2015 GDP forecast from growth of 1.2% to contraction of 0.8%, meaning that Russia expects to fall into recession next year. After the ruble hit an all-time low against the US dollar on Monday, the economic problems are adding up for Russia. Business Insider’s Elena Holodny also outlined another major problem facing Russia: brain drain. During each of 2012, 2013, and 2014, more than 100,000 people have left the country after fewer than 40,000 Russians emigrated in 2010 and 2011.
5. The US-traded ETF that tracks the Russian stock market and trades under the ticker ‘RSX’ continues to fall, and while former White House press secretary Jay Carney once looked foolish for telling people they should short the Russian stock market back in March, that call now looks great: RSX is down about 19% since Carney’s call.
6. In a tweet on Tuesday morning, Janus Capital’s Bill Gross said that if interest rates move back towards the 3% or 4% that New York Fed president Bill Dudley has suggested they could, then bonds might be overpriced by 2% or 3%. Gross’ comments come after another bond heavyweight, Jeff Gundlach, said in an interview with CNBC that Treasuries still look relatively cheap.
Business Insider Emails & Alerts
Site highlights each day to your inbox.