Market Commentary – December 30, 2021

Kevin Jock

30th December 2021

As the year draws to a close, performance was mixed on Wall Street amid light volumes. Nasdaq settled lower, S&P500 relatively unchanged and Dow Jones inches higher to an all-time record. Whilst Omicron continues to spread, on-going evaluations reveals lower hospitalisation and death rates, boosting overall investor optimism. Meanwhile, geopolitical tensions rife with President Biden set to square off with President Putin on Thursday as Russia reinforces an alarming number of troops on Ukraine’s border.

Likewise in Europe and UK, benchmarks remained largely directionless. Though U.K. Prime Minister Johnson held back on introducing new social restrictions post-Christmas, investors’ economic assessment on Omicron is still uncertain. The World Health Organization remarked overall risk “remain very high” on the highly transmission variant.

Following suite, Asia continued overnight inactivity with Australia and Japan declining on open, but subsequently recover by sessions end. Hong Kong gapped higher despite China’s commitment to a zero-tolerance strategy against COVID.

The dollar index loss ground against majors, gold inches lower and crude oil settles above 76.50. Bitcoin’s crypto winter continues as it oscillates around the 47,000 level.

US30

Figure 1 (Source: IS Prime) IDX.US.30 Daily : Fresh highs for US growth despite geopolitical tensions and Omicron still spreading.

Headliner to Review

  • A mix of leading indicators illustrate conflicting signs within the US. Though wholesale and crude oil inventories declined respectively, pending home sales weakened, likely in anticipation of tighter monetary policy.

Headliner to Watch

  • China set to release PMI data expected to reveal a slow down in manufacturing and non-manufacturing from 50.1 to 50 and 52.3 to 52 respectively.

Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice.

Authors:
Antony Tan
Kerry Man