Investing.com - Here are the top five things you need to know in financial markets on Wednesday, December 21:
1. Dow eyes 20,000
Though the Dow Jones logged a new record intraday and closing high on Tuesday, the blue-chip index fell just short of hitting 20,000 points, reaching 19,987.63.
If the blue-chip index were able to hit the mark in Wednesday’s session, it would be the fastest 1,000 point move from one triple-zero number to another, as the Dow hit 19,000 points just 20 trading days ago on November 22.
Wall Street has undergone a strong rally since Donald Trump won the U.S. presidency, pocketing gains of around 9% on bets that the incoming leader would implement policies to spur economic growth.
2. European banks under pressure as BMPS tanks, Spanish lenders hit
Troubled Italian bank Monte dei Paschi (MI:BMPS) sank more than 8% on Wednesday as problems continued to surface. The world's oldest bank admitted it only had four months of liquidity left and the likelihood of success of its debt to equity swap looked grim, with only about the half the offer taken up.
Spanish banks weren’t without their own problems, leading Madrid’s stock market lower, after the European Court of Justice overturned a ruling limiting the lenders’ liabilities over “floor clauses” that limited the minimum drop on mortgage interest rates.
The Spanish Supreme Court had limited the amount of damage, but the European court determined that the amount of protection was “incomplete and insufficient”. According to the country’s central bank, the ruling could result in the need for Spanish banks to return between €5 and €7 billion ($5.2 and $7.3 billion) to customers.
3. Oils prices continue to rally ahead of crude inventory data
Oil prices rose for the fourth session in a row on Wednesday, as market players awaited fresh weekly information on U.S. stockpiles of crude and refined products.
After markets closed Tuesday, the American Petroleum Institute said that U.S. oil inventories fell by 4.1 million barrels in the week ended December 16, more than the expected 2.4 million barrels decline and marking the fourth draw in the last five weeks.
The U.S. Energy Information Administration will release its weekly report on oil supplies at 10:30AM ET (15:30GMT) Wednesday, amid analyst expectations for a decline of 2.5 million barrels.
U.S. crude oil futures gained 0.41% to $53.52 at 5:57AM ET (10:57GMT), while Brent oil traded up 0.42% to $55.58.
4. Global stocks mixed on weaker dollar, European bank concerns
Asian shares closed with mixed signs, as the Nikkei 225 pulled away from a one-year peak after the dollar underwent profit-taking.
European stocks were also registering mixed readings in light pre-Christmas trade as concerns over the Italian and Spanish financial sector weighed on banking sentiment.
U.S. stock futures pointed to a flat open on Wednesday as investors eyed the 20,000 point level in a light economic calendar day that would see only the release of November existing home sales. At 5:58AM ET (10:58GMT), the blue-chip Dow futures inched up 12 points, or 0.06%, S&P 500 futures slipped less than a point, or 0.01%, and the Nasdaq 100 futures edged up less than a point, or 0.01%.
5. Profit-taking in dollar pushes gold higher
Investors opted to take profit in the dollar on Wednesday, though the greenback held near 14-year highs against major rivals.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.12% at 103.13 by 5:59AM ET (10:59GMT).
The move lower in the American currency boosted gold prices, as it increases the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.22% at $1,136.15 by 5:59AM ET (10:59GMT), still hovering near 11-month lows.
Prices of the yellow metal sank to $1,124.30 last week, a level not seen since February 2.