The Omicron strain continues to spread rapidly across the planet, but stock markets are not yet reacting

The US stock indices traded without a single trend yesterday. By the end of the trading day, the Dow Jones Industrial Average (US30) increased by 0.59%, the S&P 500 Index (US500) decreased by 0.06%, and the Nasdaq Technology Index (US100) lost 1.33%. Meanwhile, the Dow Jones (US30) and S&P 500 (US500) indices made new all-time highs during the trading session but showed declines after the news. The US manufacturing PMI data for December was weak (58.7 vs. 61.1 last month). Typically, an index above 50 reflects growth in the manufacturing sector and vice versa, so at the moment, analysts believe that the US manufacturing sector is stable, despite the decline in numbers.

Analysts at JPMorgan believe US stocks still have significant upside potential. In their opinion, the main support for the indices is given by the news that the Omicron strain is less dangerous than expected and the stabilization of business activity in China.

According to Bloomberg, chip delivery times are rising again due to the rapid spread of the Omicron variant and new restrictions so that chip shortages will continue.

According to Reuters, 4.5 million Americans quit their jobs in November, a record high. Investors now look forward to the nonfarm payrolls data coming out Friday and the weekly jobless claims data that will be published on Thursday.

The US set a new global daily record of more than 1 million infections in 24 hours.

European stock indices closed yesterday in the green zone. German DAX (DE30) gained 0.82%, Spanish IBEX 35 (ES35) added 0.39%, and French CAC 40 (FR40) jumped by 1.39%, ending the trading at a record high again. The British FTSE 100 (UK100) also gained +1.63% at the end of the day. In December, the pace of British manufacturing growth was slightly higher than initially anticipated, and pandemic supply problems eased slightly. In November, German retail sales increased unexpectedly to a record annual high, despite renewed COVID-19 restrictions that are holding back a recovery in consumer activity in Europe's largest economy. The unemployment rate in Germany fell from 5.3% to 5.2%.

Protests erupted in Kazakhstan over rising fuel prices. The President of Kazakhstan imposed a state of emergency in the Mangistau region and the city of Almaty from January 5 to January 19. The state of emergency includes the introduction of a curfew from 23.00 to 7.00, restrictions on freedom of movement, including vehicles, and restrictions on entry and exit from Almaty and Mangistau region. The Internet in the country has malfunctioned, with local media reporting that the messengers Telegram, WhatsApp, and Signal have stopped working.

Following the OPEC+ meeting, representatives decided to stick to their plan to increase oil production by 400,000 bpd in February. OPEC+ countries also agreed that the oil market is currently in a state of equilibrium.

Australia reported 47,738 new daily cases, the highest since the pandemic began.

Japan's Sony announced plans to create an electric car company, Mobility. The new Sony Mobility company will begin operations in the spring of 2022. At CES in 2020, Sony unveiled a prototype of the Vision-S electric car. In December of the same year, the car was first tested on European roads, and in April, Sony conducted a test drive using remote control via the 5G network. Now, the company has announced a new phase in developing the Vision-S. Sony has unveiled a prototype of a new electric car, the Vision-S 02, with safety as a priority for the company.

Shares of Chinese real estate developer Evergrande showed a slight rise after trading resumed, even though the company needs to demolish 39 buildings on Hainan, which were found illegal. The demolition is the latest move by local authorities to seize some of Evergrande's valuable land assets. Evergrande is thus trying to pay off more than $300 billion in liabilities, including nearly $20 billion in internationally traded bonds.

Main market quotes:

S&P 500 (F) (US500) 4,793.54 −3.02 (−0.063%)

Dow Jones (US30) 36,799.65 +214.59 (+0.59%)

DAX (DE40) 16,152.61 +131.88 (+0.82%)

FTSE 100 (UK100) 7,505.15 +120.61 (+1.63%)

USD Index 96.28 +0.07 (+0.07%)

• - German Services PMI (m/m) at 10:55 (GMT+2);
• - Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• - US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+2);
• - Canada Building Permits (m/m) at 15:30 (GMT+2);
• - US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
• - US FOMC Meeting Minutes at 21:00 (GMT+2).

by JustMarkets, 2022.01.05

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.