Market Commentary – January 3, 2022

Kevin Jock

3rd January 2022

Global stock markets finished 2021 with double-digit gains due to loosen monetary policy and such rise has been particularly outstanding in the U.S., with the S&P 500 index climbed almost 27% in 2021, led by a close to 50% surge in energy stocks as oil prices have soared.

European shares descended on Friday even as they ended the year higher. Trading volumes were thin with many markets closed apart from London and Paris, with shortened trading sessions. However, the European benchmark ended the year 22% higher, its second-best year since 2009, with all of the major subsectors making yearly gains.

In Asia, both the Australian and the Chinese stock markets are closed due to the New Year’s holiday. HK stock marked their worst yearly performance in a decade following China’s regulatory crackdowns on tech firms, with the Hang Seng index slumped 14.1% in 2021.

Oil prices rose on Monday as the market kicked off 2022 on a positive note. Price of Brent crude trading at around $78.55 as of the morning Asian session. Gold was down slightly on Monday, but higher U.S. Treasury yields supported the safe-haven asset amid concerns about rising COVID-19 cases. Bitcoin prices remain flatlined at $46.8K.


Figure 1 (Source: IS Prime) IDX.HK.50 Daily : Hong Kong’s Hang Seng ended 2021 as one of the worlds worst performing benchmarks. Trading at it’s lowest value, relative to the MSCI All Country World Index in over 2 decades.

Headliner to Review

  • China’s December factory activity unexpectedly accelerated despite disruptions from COVID outbreaks and as the economy loses momentum in the fourth quarter, with the official manufacturing PMI rose to 50.3 in December from 50.1 in November.

Headliner to Watch

  • U.S. ISM manufacturing PMI is expected to be 60.4 points, down from 61.1 in last month.
  • OPEC+ kicks off its first JMMC meetings of 2022 on tomorrow, and they will probably stick to its existing plan of adding 400K barrels per day each month.

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Antony Tan
Kerry Man