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S&P 500 and Nasdaq 100 contracts advanced at the start of the new year, with major markets including Australia, Japan and China all closed for holidays in Asia. Hong Kong’s benchmark gauge fell, dragged down by developers and tech companies, while equities pared gains in South Korea and Taiwan. Euro Stoxx 50 futures were little changed.
Last year “was simply a period of ‘risk on,’” Jefferies strategists led by Sean Darby wrote in a note. “Peering into 2022, we expect volatility to rise, meaning that the return per unit of risk comes to the forefront.”
All eyes are on the omicron variant of Covid-19, which is spreading rapidly but also appears to be less severe than some earlier variants based on the rate of hospitalizations. Investors are also focusing on the policy trajectory of the Federal Reserve and other central banks into 2022, particularly as inflation continues to present a challenge.
There’s a “positive setup into 2022 with Fed and Covid headwinds to ease, and China policy tailwinds,” JPMorgan Chase & Co. (NYSE:JPM) strategists led by Mixo Das in Hong Kong, wrote in a report Sunday. “Overall, our economists see less disruption to economic activity and above trend global growth this quarter, particularly in Asia. In terms of Fed tightening, the moment of peak disruption for markets may also be passing.”
Asia’s factory activity continued to expand in December, according to a slew of data released Monday, boosted by resilient demand and the easing of supply-chain bottlenecks.
While no specific reason was given for the halt in Evergrande trading, Chinese developer shares sank amid local-media reports that the company had been ordered to tear down apartment blocks at a project in Hainan province.
Oil edged higher as Libyan output declined before an OPEC+ meeting on Tuesday to discuss production policy.
What to watch this week:
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
Currencies
Bonds
Commodities
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