U.S. stock indexes are rallying on Thursday and the Dow gained over 350 points, reaching record territory after surpassing 24,000, and boosted by hopes of impending tax reform approval in the U.S. Senate which is expected to vote on tax reform legislation this week.
Despite lofty valuations, U.S. stock indexes have breached record heights in November, led by decent corporate earnings, improving economic data, and hopes of U.S. fiscal tax reforms.
Yesterday the U.S. Department of Commerce reported that U.S. GDP expanded 3.3 percent in the 3rd quarter of 2017, according to their 2nd estimate.
During the first estimate, U.S. GDP growth in the 3rd quarter expanded 3.0 percent.
The National Retail Association reported on Tuesday that from Thanksgiving Day through Cyber Monday, over 174 million Americans shopped in stores and online over the Thanksgiving week-end, beating the 164 million estimated shoppers from an earlier survey by the National Retail Association and Prosper Insights and Analytics.
Average spending per person over the 5 day period was $335.47.
“All the fundamentals were in place for consumers to take advantage of incredible deals and promotions retailers had to offer” said Matthew Shay, President and CEO of the National Retail Association in a statement.
“From good weather across the country to low unemployment and strong consumer confidence, the climate was right, literally and figuratively, for consumers to tackle their holiday spending lists online and in stores” Shay added.
Earlier this morning, the U.S. Department of Commerce reported that consumer spending in October increased 0.4 percent.
Brent Crude prices are moving modestly higher on Thursday and is currently trading at 63.30 (+ .30 percent) for January 2018 futures after OPEC leaders in Vienna, Austria are said to expand production cuts until the end of 2018 from March 2018.
Coordination with non-OPEC member Russia concerning production cuts is still underway.
The U.S. is not participating in the production cuts as investment dollars continue to support the U.S. shale industry.
Khalid A. Al-Falih, President of the OPEC Conference and Saudi Arabia’s Minister of Energy, Industry, and Mineral Resources said in his opening address to OPEC leaders that global GDP growth has been robust in 2017 and cited the IMF’s 3.6 percent estimate which is expected to grow to 3.7 percent in 2018.
Al-Falih said that OPEC continues to see further signs of strong oil demand.
“Over recent months, demand numbers have been revised upwards on a regular basis, with growth now standing above 1.5 million barrels a day for both 2017 and 2018” Al-Falih said.
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