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Investors and traders quietly resumed activity immediately after turning from a long weekend, with a thrust of optimism as reports suggest that the Omicron variant is much less serious.
Before the end of the trading session, news came from France about the reintroduction of restrictions on Omicron Covid-19 spike, the EUR/USD pair has further steadied and the shared currency barely advanced some 0.05% during the New York session. A risk-on market mood weighed on the dollar versus the Euro, despite the US Dollar Index advancing 0.10%.
Low volumes are the main trend for this week, heading into the year-end. The US dollar shed some ground against most major rivals but advanced against the safe-haven yen. USD/JPY trades at 114.90, not far from the year high at 115.51.
A risk-on market mood keeps US equities and the black-gold advancing, despite the spread of the newly discovered Covid-19 variant called Omicron, which spurred the cancellation of flights on the Christmas weekend due to staff quarantine and shortages. Western Texas Intermediate has advanced by 2.66% during the New York session, exacerbated by thin trading liquidity conditions.
The market sentiment is positive despite the Omicron variant worldwide outbreak. Tilted to the upside, though a break above the 50-DMA would open the path towards USD 79.00.
Western Texas Intermediate, also known as WTI, US crude oil benchmark, surged during the New York session, trading at USD 75.74.
Economic Data
Texas factory output grew in December at the same pace compared with the previous month, data from a survey compiled by the Federal Reserve Bank of Dallas showed Monday.
The production index of the Texas Manufacturing Outlook Survey which is a key measure of state manufacturing conditions, fell slightly to 26.7 in December from 27.4 in November, indicating that output continued to expand robustly, the Dallas Fed said.
The index for general business activity, which assesses broader business conditions in the manufacturing sector, dropped to 8.1 from 11.8, below the 15.0 consensus forecast from economists polled by The Wall Street Journal and signaling that overall activity cooled somewhat.
A positive index signals growth, while a negative reading suggests activity is declining. Factories across the US are bustling due to strong demand, but supply-chain bottlenecks have been constraining output as firms cannot get the necessary raw materials and inputs to produce goods.
It has been another busy holiday season this year with online sales growing 11% year-over-year (YoY) according to the latest Mastercard SpendingPulse market intelligence which focuses on the measurement of in-store and online retail sales across all modes of payment.
The data, which covers sales from 1 November to 24 December and excludes automotive sales, has showed that overall retail sales grew 8.5% YoY in 2021.
According to the report, “Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves. Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best dressed foot forward.”
Consumers shopped early continuing a key trend from 2020, US consumers shopped earlier than in years past, as retailers offered special promotions early and then again later in the season as shoppers raced to secure “guaranteed by Christmas” shipping offers. Looking at Mastercard’s expanded holiday season, total retail sales were up +8.6%* YOY for the 75 days between 11 October and 24 December.
Other Developments
The emerging claim that antitrust can combat inflation reflects science denial, according to a tweet by Harvard economist Lawrence Summers, a senior official in the Obama and Clinton administrations. “There are many areas like transitory inflation where serious economists differ. Antitrust as an anti-inflation strategy is not one of them”, Summers added.
Tesla’s earnings as well as deliveries are expected to jump year-over-year when Elon Musk’s carmaker reports fourth-quarter figures in early January. Tesla stock rose Monday, rising to a trendline buy point.
The maker of upscale electric cars could report Q4 deliveries as early as 1 January and as late as 5 January, with Monday 3 January a likely date.
FactSet consensus figures are for 261,400 Model 3 and Y vehicles and 15,500 Model S and X vehicles. That totals 276,900 vehicles. In Q3, Telsa delivered 241,300 vehicles in the quarter, beating estimates for 232,000 but some analysts are more even bullish on Q4 deliveries.
Gold versus the US dollar slightly advances during the New York session, trading at $1,809.01, and thin liquidity conditions kept the market sentiment fluctuating between gainers and losers to conclude; the precious metal managed to rise despite broad US dollar strength
The US 10-year Treasury yield is flat, clinging to the 1.484% threshold, a tailwind for the non-yielding metal vs. the US dollar. At the same time, the US Dollar Index, which tracks the American currency’s value against a basket of its rivals, climbs some 0.15%, up to 96.17, staying above the 96.00 figure for the second consecutive week.
Also Read:
Will Antitrust Versus Inflation Strategy Ease Biden’s Worries?
Institutional Investors Overcome Barriers To Bitcoin
Mastercard’s Holiday Data Signaling Growing Online Shopping
Nio Shares Were Up, Then Down Monday
Strong Q4 Deliveries Push Tesla Stock To Flash Buy Signal
WTI Around USD 76.00 Amid Positive Market Mood
European Stocks Trade Higher In Final Week Of 2021
USA Dallas Fed Manufacturing Business Index Falls
Wall Street Surges To All Time Highs As Year End Looms
