Overnight global oil cartel OPEC and Russian producers agreed to increase their output by 500,000 barrels a day next month. The deal represents a modest uptick in oil production and a compromise between the group, which had been in disagreement earlier in the week. Oil demand is still under pressure from the Covid-19 pandemic, but the increase is equivalent to less than 1% of the global oil market, according to The WSJ. The group was split between nations which wanted an increase of up to two million barrels a day, and those which wanted to maintain production cuts. Oil prices have now cleared the $46 a barrel mark, and if progress continues the incentive to hold off on production may lessen. 

In other news, investors watching US initial weekly jobless claim figures for signs that the country’s economic recovery is stalling were met with welcome news. The latest initial claims for state unemployment benefits fell by 75,000 for the week ended November 28th, to 712,000, following weeks of back-to-back increases since July.

Travel names lead the S&P 500

US stocks were mixed once again on Thursday, with the S&P 500 down a fraction and the Dow Jones Industrial Average up by 0.3%. In the S&P 500, the energy and real estate sectors gained 1.1% and 0.7% respectively, while the utilities sector fell 1.1% and the materials sector was down by 0.7%. Travel names were among the day’s biggest winners thanks to continued vaccine optimism, with Norwegian Cruise Line up 8.6%, American Airlines (AAL) up 8.3%, and United Airlines (UAL) up 6.8%. In the Dow Jones Industrial Average, pharmacy retailer Walgreens Boots enjoyed the best day, with a 7.5% gain, followed by Boeing (BA) up 6%. Walgreens stock is now up by 14.1% over the past month, which has brought its year-to-date loss down to -27.4%.

One factor dampening optimism on Thursday was the news that the Covid-19 hospitalizations and deaths both set new records. While investors have been viewing vaccine progress favorably, the record figures are a stark reminder that there is still a long road ahead for the US economy.

S&P 500: -0.1% Thursday, +13.5% YTD

Dow Jones Industrial Average: +0.3% Thursday, +5% YTD

Nasdaq Composite: +0.2% Thursday, +37.9% YTD

Rolls Royce leads FTSE 100 with a 15% gain

London-listed stocks continued to make progress on Thursday, with the FTSE 100 and FTSE 250 now up by 2% and 3.8% respectively over the past five trading days. The FTSE 100 has now gained 9.9% over the past month, while the FTSE 250 has surged by 15.3%. Rolls Royce led the index on Thursday with a 15.6% gain, after it said that the slump in air travel caused by the Covid-19 pandemic may give it the breathing room to develop new jet engine technologies and potentially re-enter the narrow-body airliner market, according to Bloomberg. 

The FTSE 250 was led by Cineworld Group, which gained 14.5% on Thursday as investors piled into the stock following the UK’s approval of the Pfizer Covid-19 vaccine. Over the past five trading days, Cineworld stock is up 32.3%, and it has gained 157% over the past month. Year-to-date, the firm’s share price remains down 66.7%.

FTSE 100: +0.4% Thursday, -14% YTD

FTSE 250: +1.3% Thursday, -8% YTD

What to watch

US jobs report: All eyes will be on November’s job report from the Bureau of Labor Statistics on Friday, investors will be watching to see whether surging Covid-19 case numbers in the US have damaged the labor market. In October, jobs growth was better than expected, and the unemployment rate fell to 6.9% versus an expected 7.7%. The consensus forecast for November is an unemployment rate of 6.8% and 469,000 new jobs (non-farm payrolls) added. In October, non-farm payrolls increased by 638,000, but since then new lockdown restrictions have come into effect across many locations in the US.

Halifax house prices: Following Nationwide’s UK house price data this week, which showed house prices grew at an annual rate of 6.5% in November, a five-year high, Halifax will deliver its own house price data on Monday. Transaction volumes have been boosted by the stamp duty holiday, which runs until the end of March and offers a significant incentive for potential buyers to snap up homes quickly.

Crypto Corner: S&P Dow Jones to launch cryptoasset index in 2021

S&P Dow Jones Indices, the financial data firm, has announced it will launch a customizable cryptoasset indexing service in partnership with data provider Lukka in 2021.

Amidst increasing institutional interest in the sector, S&P Dow Jones said it wanted its new product to offer more transparency to investors.

“We’ve been watching [the digital asset space] and we feel it’s at a point of institutional interest in maturity, where companies such as ours wants to get in and contribute to the transparency of the marketplace,” Peter Roffman, global head of innovation and strategy at S&P Dow Jones Indices, was quoted as saying.

There are already numerous indices offering exposure to cryptoassets, but Roffman said the product would bring his firm’s experience and its drive for transparency to the sector.

“It’s going to really employ best practices, both in terms of pricing the coins, selecting the coins, weighting them, you know, and all of the concomitant transparency that we bring to the marketplace,” he said.

Lukka chief executive Robert Materazzi added his company’s “Lukka Prime” pricing methodology “is part of our relationship with S&P.”

All data, figures & charts are valid as of 04/12/2020.