MOSCOW, December 20 (Sputnik) — US markets gained for a third consecutive day Friday with the S&P 500 performing at its finest in roughly two months, driven by a rebound in energy stocks as crude advanced.
Bloomberg data. Weekly gains in both indices have been 3% and 2.4%, respectively.
These past three trading sessions were dominated by bullish investor sentiments, encouraged by both a slight resurgence in energy prices, as well as the US Federal Reserve’s decision to keep the ultra-low interest rate in place with a ‘patient’ attitude toward further monetary tightening.
"Fears have been at least pushed once again to the sidelines," Michael James of Los Angeles-based Wedbush Securities told CNBC’s Money Control.
The total value of US shares has tripled during the last five and a half years due to the unconventional policies implemented by the Fed, which were aimed at stimulating the economy through several rounds of bond buying and by offering an unprecedentedly low borrowing rate. The recent slump in oil prices and signs of a general slowdown in the global economy have, however, caused losses in the markets, estimated at as much as $1 trln. This might be the main reason the Fed has decided to keep the considerably easy monetary policies in place for a while despite US macroeconomic indicators suggesting its time to tighten up borrowing costs.
Trading volumes were high on Wall St. as nearly 10.9 bln equities were bought and sold compared to this month’s average figure of 7.6 bln, as reported by Reuters. However, markets are expecting more volatility up ahead.
"You will see some pain in the short term because of fourth quarter earnings," James Liu of JPMorgan Funds in Chicago told Reuters. "So the broad S&P 500 will take a hit based on that, but over the next several quarters it is clearly going to be a good thing."
Markets are expecting oil prices to stabilized at their current level, which may signal an upcoming acceleration in global growth.