US Stock Market Overview – Stocks Rally as War Rhetoric is Pulled Back

US Stocks surged higher, following news that Tuesday’s attacks by Iran on an Iraqi military base that house US soldiers, did not result in any casualties. Iran has said that they had sent a proportional response to the killing of their top military leader, helped reduce tension and paved the way for lower tensions which helped buoy stock prices. A statement from President Donald Trump that seemed to pull back on the President’s rhetoric, allowed riskier assets to gain traction. Oil prices tumbled following the news that tensions have been pulled back. Additionally, a larger than expected build in crude oil inventories helped push WTI down 4.3%. Most sectors in the S&P 500 index were higher, led by Healthcare, energy bucked the trend.

ADP Private Payroll Rose More than Expected

Private payroll growth ended 2019 on a strong note, with companies adding 202,000 positions in December according to ADP and Moody’s Analytics. This eclipsed the 150,000 consensus estimate ahead of the government’s official count that will be released Friday. Economists expect the Labor Department’s tally to show a gain of 160,000. In addition to the solid December growth, ADP revised the initial November count of 67,000 up to 124,000. Job gains for the month were spread across sectors, with construction adding 37,000, the best monthly gain since April and a reversal of the initially reported 5,600 loss in November. Goods-producing industries added 29,000 after dropping 17,600 a month ago. Manufacturing saw a decline of 7,000 while natural resources and mining fell by 1,000. Services added 173,000, led by 78,000 in trade.

Energy Inventories Rose More than Expected

Crude oil inventories increased by 1.2 million barrels from the previous week, which was more than expected. The real increase came in gasoline inventories which surged 9.1 million barrels last week and are about 5% above the five year average for this time of year. Distillate fuel inventories increased by 5.3 million barrels last week and are about 8% below the five year average for this time of year. Total commercial petroleum inventories increased last week by 14.8 million barrels last week.