Market Commentary – January 7, 2022

Kevin Jock

7th January 2022

U.S. tech shares dropped at the end of a wild trading day on Thursday, where a hawkish tilt from the Fed dampen the investment outlook for US stocks, with the Nasdaq slid marginally by 0.13%, as well as the S&P 500 which dropped 0.1%. Energy companies are among the top performing stocks as the rally in oil continues.

European stocks tumbled from record highs on Thursday, also due to the hawkish Fed meeting minutes, with the European tech stocks among the biggest decliners in the region, dropped by 2.4. FTSE 100, CAC 40 and DAX indices fell by 0.9%, 1.7% and 1.4% respectively.

Japan’s Nikkei 225 index rose slightly on Friday’s morning open, but it then fell into negative territory before the mid-day close, at 28,395.24 points, extending yesterday’s loss after the Fed minutes. While both the Shanghai Composite and Hang Seng indices rose by 0.35% and 1% respectively, before the morning close.

Oil prices rose on Friday as an uprising in Kazakhstan worried crude supplies, with Brent crude climbed to $82.7 as of the Asian morning session. The sell-off in cryptocurrencies that began after the Fed comments is continuing with the price of Bitcoin fell by 8%. Likewise, gold price dipped as well, to below $1,800 per ounce.

image_2022_01_07T05_12_39_235Z

Figure 1 (Source: IS Prime) SPT.CO.US Daily : Bullish start to 2022 for crude as prices bypass $80, recording 4 consecutive days of advances.

Headliner to Review

  • The U.S. Labor Department reported first-time unemployment claims increased last week to 207K, an increase of 7000 from the previous week’s upwardly revised number and well above economists’ forecasts. This is due to the spread of the Omicron variant impacted the workforce.
  • U.S. economic activity in the services sector grew in December for the 19th month in a row, with the Services PMI registered 62%, 7.1% below November’s all-time high reading of 69.1%.

Headliner to Watch

  • Unemployment rate of the Euro area is due to announce on next Monday, with the previous month’s figure of registering 7.3%.

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Authors:
Antony Tan
Kerry Man