U.S. stocks on Monday made marginal gains, extending their seven-week bull run. Sentiment was buoyed by a spate of activity in the mergers and acquisitions space.
With markets hovering near record levels and traders looking ahead to the end of year, the question is whether Wall Street will be able to sustain its rally into the new year.
The S&P 500 (SP500) led the three major averages in mid-day trade, adding 0.54% to 4,744.62 points. The benchmark gauge is coming off a weekly gain of nearly 2.5% after the long-awaited Federal Reserve dovish pivot arrived last Wednesday.
The tech-heavy Nasdaq Composite (COMP.IND) was higher by 0.52% to 14,891.05 points, while the blue-chip Dow (DJI) climbed 0.16% to 37,366.59 points.
With today kicking off the final full trading week of the year and next week likely to see some low volumes due to the Christmas holiday season, market participants will hope to see an extension of the current seven-week win streak that Wall Street is in the midst of.
“As we arrive at the final week before Christmas, the astonishing market rally has shown no sign of abating after the Fed signaled 75bps of rate cuts next year. Indeed, the S&P 500 (SP500) has now advanced for 7 consecutive weeks for the first time since 2017,” Deutsche Bank’s Jim Reid said.
“That signal from the Fed marked a big shift from the ‘higher for longer’ narrative on rates, which had briefly taken the 10yr Treasury yield (US10Y) above 5% in late-October. But the big question is now when these rate cuts might happen, and on Friday we had some mild pushback from Fed officials against the market excitement,” Reid added.
Of the 11 S&P sectors, nine were in the green, led by Communication Services.
Energy gained ~1.5% as WTI crude oil futures (CL1:COM) added nearly 3%. The rise came amid tanker ships seeking different routes to avoid attacks in the Red Sea by Yemeni Houthi militants. Oil major BP (BP) became the latest company to pause shipping through the key body of water.
It was “merger Monday” for investors, with several deals being inked. The most significant was Nippon Steel’s (OTCPK:NISTF) (OTCPK:NPSCY) $14.9B acquisition of US Steel (X) – the latest twist in the storied steelmaker’s bidding war. Its shares jumped more than 27%, but was still below Nippon’s $55/share deal price.
Also in the spotlight was beleaguered luxury retailer Farfetch (FTCH), which managed to secure a last-minute rescue after South Korean e-commerce giant Coupang (CPNG) agreed to buy its assets and business and provide it with $500M of capital. Farfetch (FTCH) stock is expected to be delisted and liquidated.
Additionally, software firm Alteryx (AYX) said it be taken private by private equity firms Clearlake Capital and Insight Partners in a $4.4B deal. Class A shares of Alteryx (AYX) slipped about 2%.
A deal termination grabbed some eyeballs as well, after Adobe (ADBE) and Figma called it quits on their proposed $20B merger amid regulatory hurdles in the UK and Europe.
Apple (AAPL) garnered some attention on Monday. The world’s largest company by market capitalization saw its stock fall over 1% after a report that it will halt sales of its Watch Series 9 and Watch Ultra 2 models in the U.S. amid an ongoing patent dispute with Masimo (MASI).
Turning to the fixed-income markets, Treasury yields were higher. The longer-end 30-year yield (US30Y) was up 4 basis points to 4.07%, while the 10-year yield (US10Y) was up 3 basis points to 3.96%. The shorter-end more rate-sensitive 2-year yield (US2Y) was up 1 basis point to 4.47%.
See live data on how Treasury yields are doing across the curve at the Seeking Alpha bond page.