Market Commentary – January 4, 2022

Kevin Jock

4th January 2022

U.S. equity markets are beginning the new year with gains on optimism the recent spread of COVID-19 may be peaking soon, with the Dow, S&P 500 and Nasdaq are all rising. Among Monday’s biggest movers, Tesla surged more than 13% after the carmaker negotiated supply-chain disruption to report forecast-beating deliveries for the fourth quarter. A rally in shares of Apple, which pushed the iPhone maker’s market capitalization to $3tn, also boosted the index.

Across the Atlantic, European shares ended at all-time highs on Monday, starting the year in an upbeat mood on hopes of steady economic recovery despite a surge in COVID-19 cases due to the Omicron variant, with automakers led gains among European sectors with a 2.4% rise. EURO STOXX 50 index ascended by 0.78%, while both the CAC 40 and DAX rose by 0.9% and 0.86% respectively.

Elsewhere in Asia, Japanese shares jumped more than 1% on the first trading day of the year on Tuesday, led by strong performances in chip-related heavyweights and automakers, while Wall Street’s overnight upbeat finish also boosted risk appetite. Shares of AI company SenseTime rose 20% after the opening bell on Tuesday to as much as HK$9.7 apiece, up 152% since the company priced its IPO at HK$3.85 in late December, even under the condition when U.S. accusing it of having developed a facial recognition program to determine ethnicity, with a focus on identifying ethnic Uyghurs.

Oil prices edged higher on both sides of the Atlantic ahead of an Opec meeting to discuss boosting output. Brent crude ticked up 1.5% to settle at $79.2 a barrel following reports that Libya’s production had been choked off due to a damaged pipeline. Gold prices tumbled on the first trading day of 2022 as the dollar rallied and yields rose, closes just above $1,800.

image_2022_01_04T03_41_18_923Z

Figure 1 (Source: IS Prime) IDX.EU.50 Daily : STOXX 50 despite recovering from November’s tumble, continues to lag other developed benchmarks.

Headliner to Review

  • Manufacturing PMI of the major European nations are released, with Switzerland, Italy and France’s figures all beat expectations, came out to be 62.7, 62 and 55.6 respectively.
  • The U.S. Manufacturing PMI posted 57.7 in December, down from 58.3 in November, as firms register slower upturn in new orders.

Headliner to Watch

  • U.S. ADP Non-Farm Employment figure is due to release on Wednesday, forecasted to increase by 405K.

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Authors:
Antony Tan
Kerry Man