Global Fundamental Analysis 04/01/2022

Australian Market

Australia’s S&P/ASX 200 index also was closed for the New Year’s Day holiday.

US Market

U.S. stocks rose in the first session of 2022 and Apple briefly touched a $3 trillion market capitalization, though investors were also monitoring cases of the Omicron variant of Covid-19. The S&P 500 gained 0.6%, closing at a record after a year where it rose 27% and notched 70 record highs along the way. The tech-focused Nasdaq Composite Index rose 1.2%, while the Dow Jones Industrial Average rose 0.7% — also ending at a new high.  

“Today looks like a classic reopening,” said LPL Financial market strategist Scott Brown. He noted that Monday’s gains were being driven by stocks in the energy, consumer discretionary and financial sectors. Shares in sectors that are less tied to prospects for growth, like consumer staples and healthcare, were down. The most notable gainer was Apple, whose market capitalization briefly crossed the $3 trillion mark in the afternoon, the first company on record to be so richly valued.

Commodities

Gold futures declined to start the new year on the backfoot, with prices settling at their lowest in almost two weeks in the wake of rising stocks and Treasury rates. February gold fell 1.6% to settle at $1,800.10 an ounce on Comex after tapping a low of $1,798.20. The settlement was the lowest for a most-active contract since Dec. 21, FactSet data show. February gold hasn’t been able to trade over its 400-day moving average of around $1,826.10, and that has led to a fall in prices, said Chintan Karnani, director of research at Insignia Consultants.

Oil Futures

Oil futures ended higher, beginning 2022 on a positive note as traders built on the strongest annual rise for crude in 12 years, a day ahead of an expected decision on crude production levels from major oil producers. West Texas Intermediate crude for February delivery rose 1.2% to settle at $76.08 a barrel on the New York Mercantile Exchange. March Brent crude, the global benchmark, added 1.5% at $78.98 a barrel on ICE Futures Europe.

The Organization of the Petroleum Exporting Countries and their allies are to meet Tuesday to decide on output levels in February. It appears OPEC is unlikely to “change from the script,” and will raise output by its expected 400,000 barrels a day, said Phil Flynn, senior market analyst at The Price Futures Group, in a note.

Forex

Major currencies were generally weaker against the US dollar in European and US trade. The Euro fell from US$1.1365 to around US$1.1280 and was near US$1.1295 at the US close. The Aussie
dollar fell from near US72.60 cents to US71.85 cents and was near the lows at the US close. And the Japanese yen eased from 114.96 yen per US dollar to JPY115.35 and was near the weakest levels at the US close.

European Markets

European sharemarkets rose in thin trade on Monday as investors shrugged off concerns about rising Omicron case numbers. Automakers led gains, up 2.4%, with banks up 0.9%. On broker upgrades, shares in Air France KLM rose 4.9% and shares in Lufthansa rose by 8.9%. Reuters noted that “planemaker Airbus rose 3.4% after sources said it had provisionally exceeded its target of 600 jet deliveries in 2021.” The pan-European STOXX 600 index rose by 0.5% to record highs. The German Dax index lifted 0.9%. The UK sharemarket was closed on Monday.

Asian Markets

Japan’s Tokyo Stock Exchange was closed for the New Year’s Day holiday. In China, the Shanghai and Shenzhen stock exchanges were closed for the New Year’s Day holiday. Hong Kong shares ended lower in the first trading session of 2022, with the Hang Seng Index losing 0.5%. Chinese property developers and managers retreated amid continued concerns about their debt woes as trading in China Evergrande shares was halted pending inside information.