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After holiday-thinned trade, US stocks are set to open muted after reaching record highs

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The corner street signs of Wall Street and Broad Street are seen during the 98th Annual Christmas Tree lighting ceremony at the New York Stock Exchange on December 1, 2021 in New York.

Corner street signs during the 98th Annual Christmas Tree Lighting Ceremony at the NYSE on Dec 1, 2021

On Thursday, the US stock index futures stumbled in light trading after hitting another record in a choppy session.

Futures on the Dow Jones and S&P 500 rose about 0.05%, while those on the Nasdaq rose 0.1% as of 4:00 a.m. ET, suggesting a slightly later open. Biogen soared 13% on Wednesday.

Dr Anthony Fauci, the White House chief medical advisor, said Wednesday that the latest COVID-19 wave, in which Omicron is the most prevalent variant, could reach its peak by late January. The US could surpass its January record of 250 437 daily cases, according to CDC data.

“Despite global increases in COVID cases,” Kevin Philip, managing director of Bel Air Investment Advisors, stated that the markets reflect the new reality that COVID will be around, but more on their terms than his. It now seems like a manageable virus, comparable to colds and flus. There are vaccines, boosters and treatments. 

The US data will be released later today and is expected to show that initial jobless claims fell below 200,000 for the week. This is likely bolster the bullish sentiment in markets.

Other countries reported a daily record of 183.037 cases in the UK on Wednesday. France also set a new record for Europe with 208,000 cases.

There should be some optimism, Joshua Mahony, senior analyst at brokerage IG said. Omicron appears likely to replace Delta.

He said that Omicron could bring about a faster return to normality, despite the fact that it increases the risk of short-term restrictions.

Early trade was flat for London’s FTSE 100 and Frankfurt’s DAX. The Euro Stoxx 600 was also flat.

Asian equities traded mixed following reports that Evergrande, the troubled developer, once again missed two offshore bond payments on Tuesday and tightening COVID-19 in the Chinese city Xian.

The Shanghai Composite gained 0.6% while Hong Kong’s Hang Seng gained 0.1%. Tokyo’s Nikkei lost 0.4%.

According to John Hardy (head of FX strategy at Saxo Bank), the market could face completely different challenges in 2022.

He stated that the US equity market had a very successful 2021, but could face some challenges in the next year due to rising wages and inflation, as well as the risk of tighter Fed policy putting pressure upon valuations, particularly if Treasury yields continue to rise next year.

Read More: ‘Nothing is more supremely irritating than watching your neighbors get rich’: Legendary investor Jeremy Grantham breaks down the psychology of investing in bubbly assets like Dogecoin — and shares where long-term investors can find cheap assets

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