The markets are once again under the shadow of a Santa Claus rally. The S&P 500 (US500) gained 1.75%, and the Dow Jones (US30) gained 1.05% as of Thursday’s market close. The NASDAQ Technology Index (US100) increased by 2.39%.
The US Department of Labor reports that the number of Americans requesting unemployment insurance increased last week, as anticipated. For the week, seasonally adjusted initial claims increased from 216,000 to 225,000.
Yesterday, most European stock markets were up. Spain’s IBEX 35 (ES35) closed up by 0.68%, Germany’s DAX (DE30) closed up by 1.05%, France’s CAC 40 (FR40) closed up by 0.97%, and Britain’s FTSE 100 (UK100) closed up by 0.22%.
The Health Safety Committee of the European Union called for coordinated action in response to a probable uptick in COVID-19 cases as China starts to relax its long-standing, stringent pandemic controls. The declaration was made in response to the US and Italy joining a group of nations on Wednesday that also included Japan, India, South Korea, and Taiwan and demanding verification of negative COVID tests for arriving airline passengers from China. Shares of Air France KLM (AIRF), International Consolidated Airlines Group (ICAG), and German airline Deutsche Lufthansa (LHAG) all experienced steep declines on the trading day.
Today, Spain will publish its inflation statistics. Consumer prices are anticipated to decline from 6.8% to 6.1% annually. Spain is one of the few European countries where inflationary pressures have gradually and monthly decreased.
Oil prices have risen significantly over the past few weeks as a result of China relaxing its COVID Zero policy, but the current spike in cases has sparked worries throughout the globe. The fact that certain nations have already announced extra criteria for Chinese travelers raises concerns that COVID may begin to spread once again. Additionally, last week saw a 700,000 barrel increase in crude oil inventories, which put additional pressure on oil prices yesterday.
The majority of Asian indices yesterday were lower. India’s NIFTY 50 (IND50) increased by 0.38%, China’s FTSE China A50 (CHA50) dropped by 0.68%, Hong Kong’s Hang Seng (HK50) was down by 0.79%, and the S&P/ASX 200 (AU200) finished lower by 0.94%.
In an indication that actions taken to double the yield cap on government bonds are part of a continuing stimulus rather than altering the course of monetary policy, the Bank of Japan announced two further rounds of unexpected bond purchases. However, a larger and more regular involvement of the Bank of Japan in the market runs the risk of reducing liquidity and further skewing the yield curve. Analysts predict that control over the yield curve is about to reach its limit, but the central bank makes no mention of this.
As China’s economy slowed down and global demand worsened, Hong Kong’s exports in November plummeted to their lowest levels in over seven decades. Overseas shipments decreased by 24.1% from a year ago last month. The largest decline in imports since 2009 occurred in November, when they dropped by 20.3% from a year earlier.
S&P 500 (F) (US500) 3,849.32 +66.10 (+1.75%)
Dow Jones (US30) 33,220.87 +345.16 (+1.05%)
DAX (DE40) 14,071.72 146.12 (+1.05%)
FTSE 100 (UK100) 7,512.72 +15.53 (+0.21%)
USD Index 103.89 -0.57 (-0.55%)