Dow Set-up For Historic End-of-Year Close

James Hyerczyk

Updated Thu, Dec 28, 2017, 7:56 PM

Despite extremely thin trading conditions, the Dow posted its 71^st record close for the year on Thursday. According to CNBC, the Dow is on pace for a slightly higher close this week. This would mark the first time since 1954 that the Dow rose in each of the final six full weeks of the year.

Daily March E-mini Dow Jones Industrial Average

The price action was muted again, with the second-fewest amount of shares transacted of any full trading day this year. This means that many investors are on the sidelines ahead of the last day of trading for 2017. This may be because they are putting off selling until January because they can delay recognizing the gains until the more beneficial 2018 tax year.

The major U.S. equity markets finished higher on Thursday with the blue chip Dow posting a record close. The benchmark S&P 500 Index was also higher, closing within half a percent of its all-time high. The tech-based NASDAQ Composite struggled all session before posting a slight gain.

U.S. Economic Reports

U.S. Weekly Unemployment Claims came in higher than expected at 245K, matching last week’s read. Traders were looking for 240K.

The Goods Trade Balance rose more than expected to -69.7 billion. The forecast was for a read of -67.7 billion. Last month’s figure was 68.1 billion.

Preliminary Wholesale Inventories were worse than expected, increasing 0.7%. The forecast was for an increase of 0.4%. Last month’s number was revised to the better at -0.5%.

Finally, Chicago PMI posted a robust 67.6, beating the 62.2 forecast and last month’s 63.9.

U.S. Treasury Bonds

U.S. government debt futures closed lower on Thursday and yields rose after economic data showed the number of Americans filing for unemployment benefits was unchanged and the Chicago PMI beat expectations. Volume continued to come in well below average.

The yield on the benchmark 10-year Treasury note was higher at around 2.431 percent, while the yield on the 30-year Treasury bond was up at 2.761 percent.

There was another auction on Thursday. The U.S. Treasury auctioned $28 billion in 7-year notes at a high yield of 2.37 percent. The bid-to-cover ratio, an indicator of demand, was 2.55. Indirect bidders, which include major central banks, were awarded 60.5 percent. Direct bidders, which include domestic money managers, were awarded 13.1 percent.

This article was originally posted on FX Empire