The United States reported a record high in COVID-19 cases, with an average of nearly 400,000 new cases added in a single day last week, a surge in hospitalization rates, and wide-scale disruption of flights. The FDA of the U.S. Food and Drug Administration authorizes Pfizer vaccine boosters for children ages 12 to 15, as well as boosters for children aged 5 to 11 years with compromised immune systems, and has also reduced the distance between initial vaccinations and boosters from six to five months.
Supply chain problems have eased, the eurozone manufacturing PMI final value remained strong in December, and the US Markit manufacturing PMI final value in December was 57.7, a new low since December 2020, but the European and American manufacturing industry is still in the expansion range. U.S. construction spending in November was 0.4% m/m, significantly weaker than expected at 0.7%, but higher than 0.2% previously.
The Fed's overnight reverse repurchase tool use hit its biggest all-time decline, with fixed-rate reverse repurchase instrument use at $1.580 trillion on Monday, well below the previous day's record $1.905 trillion and about $325 billion the decline was the largest since recorded in 2013.
U.S. stocks rose in unison after turning down, Apple Ford hit a new high, and Tesla rose more than 13% to boost the NASDAQ by 1 percentage point
Monday, January 3, the first trading day of the 2022 New Year, opened high on the three major U.S. stock indexes, but turned down en masse at one point in the opening half an hour. After midday, the NASDAQ, which is dominated by technology stocks, rose nearly 200 points and the Dow rose nearly 250 points, boosting market risk sentiment at the beginning of the new year.
Both the Dow and the S&P 500 stopped falling twice and both closed at new highs. The S&P 500 closed up 30.38 points, or 0.64 percent, at 4796.56 points. The Dow Jones Industrial Average closed up 246.76 points, or 0.68 percent, at 36,585.06 points. The Composite closed up 187.83 points, or 1.20 percent, at 15,832.80 points. Russell 2000 small-cap stocks closed up 1.21% to lead other stock indices.
S&P's 11 sectors rose and fell differently, with the energy sector up more than 3%, the non-essential consumer goods sector up more than 2.7%, the financial sector up more than 1.2%, the real estate and healthcare sectors down about 1%, and the raw materials sector falling more than 1.3%.
The NASDAQ 100 index rose more than 1.1%, constituent Tesla rose more than 13.5%, AMD rose more than 4.4%, PayPal, Intel rose more than 3.3%, Apple rose 2.5%, Nvidia rose more than 2.4%, Amazon, Ctrip rose more than 2.2%, Microsoft, Adobe fell about 0.5%, Netflix fell more than 0.8%, and Modena fell more than 7.4%.
The analysis pointed out that on the one hand, investors believe that this year's economy can overcome the surge in the new crown epidemic, triggering optimism. Meanwhile, the S&P broad market rose in the first week of the new year in 11 of the past 13 years, averaging about 1.6%.
In addition, inflation and monetary policy will be key themes in 2022, with the Fed expected to raise rates for the first time since 2018 and at least three times this year, with futures traders betting that rate hikes could begin as early as May and the market could usher in a turbulent year.
FAAMNG star tech stocks have risen and fallen differently. Facebook parent company Meta Platforms rose 0.7 percent, rebounding from a one-week low. Amazon rose more than 2 percent, rebounding from its lows since early November. Apple's intraday balance was about 3% to $182.88, once becoming the first U.S. public company with a market value of $3 trillion, closing up 2.5%, hitting a new intraday and closing high. Microsoft fell 0.5 percent, down three days in a row to a week-long low. Netflix fell 0.8 percent, the lowest since two straight days into December 20. Google parent company Alphabet edged up, trading at a nearly two-week low.
Tesla rose more than 13 percent to $1,200, the highest in two months since Nov. 5, and deliveries hit new highs in the fourth quarter and full year of last year despite chip supply issues. Big automakers rose, with Ford up nearly 5 percent to hit intraday and closing highs, continuing last year's triple-digit percentage gains, with General Motors up more than 4 percent and up the highest since four straight days to Dec. 10.
Chip stocks rose in unison, and the annual Consumer Electronics Show opened in Las Vegas. The Philadelphia Semiconductor Index rose 2 percent to return to 4,000 points, essentially recovering its December 27 losses. AMD rose more than 4 percent, Micron Technology rose nearly 3 percent, and Mewell Technology rose more than 2 percent, all of which were named "Preferred Stocks" by Goldman Sachs. Nvidia rose more than 2% to stop falling for four consecutive years, and Intel rose more than 3%, recovering more than half of the decline since October 21.
Vaccine stocks mostly fell. Modena fell more than 7 percent to its lowest on Nov. 16, BioNTech fell more than 10 percent to a two-month low, Pfizer fell 4 percent to its lowest since Dec. 14, Novavax fell more than 3 percent and closed down 0.1 percent, johnson and co., Ltd. turned higher in the end of the session.
Individual stocks related to the reopening of the economy rebounded. Carnival cruises rose more than 6 percent to their highest since Nov. 16, and the NYSE Arca Airlines Index rose 2.6 percent to its highest since Dec. 9. Despite the cancellation of more than 13,000 U.S. flights from Christmas Eve to New Year's Day, largely due to bad weather and the spread of the epidemic among crew members, investors are currently focusing on the recovery of travel demand for the remainder of the year, the analysis said.
Under the Fed's expectations of interest rate hikes, US Treasury yields rose sharply, and financial and bank stocks performed well. Goldman Sachs and Bank of America rose more than 3 percent, Wells Fargo rose nearly 6 percent, and Barclays raised it to overweight. PayPal rose more than 3 percent, and BMO gave it an overweight rating.
Popular Chinese stocks rose and fell, and only Xiaopeng Automobile fell after the "three fools of car manufacturing" announced the delivery data in December:
Monster Charging rose more than 24%, Renren.com rose more than 12%, Mushroom Street rose more than 9%, Qutoutiao rose more than 8%, Xiaoying Technology rose 4%, Wuxin Technology rose 3.6%, Tuniu and Ebang International rose more than 2.9%, Xunlei rose 2%, Tucson Future rose more than 1.5%, Happy Times, Ninth City rose more than 1%, Alibaba fell 2.5% and then rose more than 1%. 360 Digital Branch fell 1.7%, JD.com fell more than 2.4%, New Oriental fell more than 3.3%, Pinduoduo fell more than 3.7%, B Station fell more than 4.3%, Jinshan Yun fell more than 6.2%, Dingdong Buy Vegetables fell about 7%, Pupu Culture fell more than 10%,
Weilai rose 5.6%, basically recovering the decline since December 13, delivering more than 10,000 electric vehicles in December and jumping 50% year-on-year. Xiaopeng Automobile rose more than 2% and then turned slightly down, delivering 16,000 units in December, an increase of 181% year-on-year, winning the crown in sales of new car-making forces for three consecutive months. Ideal ended up 0.8 percent after rising more than 5 percent, and December deliveries rose 130 percent year-on-year to more than 14,000 units, setting a new record.
The UK and Ireland continued to be closed on Monday, with the overall market trading light. The Pan-European Stoxx 600 index closed up 0.5 percent, setting new intraday and closing highs, breaking the record set in mid-November, with all major national indexes up nearly 1 percent intraday.
Germany's DAX 30 closed up 0.86%, France's CAC 40 rose 0.90%, Italy's FTSE MIB rose 1.40%, and Spain's IBEX 35 rose 0.54%. German Lufthansa's European stock rose nearly 9 percent to near a two-month high, and Citi raised it two levels directly from sell to buy.
US Treasury yields rose sharply in double digits, short-term bond yields hit the highest in the epidemic, and European sovereign bonds fell
The Fed plans to accelerate the reduction of bond purchases from January, and this week's important economic data may pave the way for a late spring interest rate hike, with US Treasury yields rising sharply at the beginning of the new year, and many strategists expect US Treasury yields to climb in 2022.
The 10-year benchmark U.S. Treasury yield rose sharply by 14.4 basis points during the day, rising above 1.64%, and above 1.60% for the first time since the opmecreon outbreak at the end of November 2021. Yields on 30-year long-term bonds rose 15.6 basis points to a more than one-month high of 2.05 percent.
The two-year Treasury yield, which is more sensitive to monetary policy, rose 7.2 basis points to the highest level since March 2020, when it rose above 0.80%. The five-year yield rose more than 10 basis points to break 1.36 percent, close to the highs of February 2020, before the outbreak in Europe and the United States.
Eurozone sovereign bond prices followed U.S. Treasuries lower, investors believe the Fed's reasons for raising interest rates are clearer, and European manufacturing data has depressed market sentiment and depressed debt prices. Some analysts said that the large number of euro government bonds will also put upward pressure on yields.
The 10-year German yield rose 6 basis points, or -0.12%, the highest since November 2021, with the 10-year French yield rising 3 basis points at 0.23%, and the 10-year Italian bond yield rose 2 basis points at 1.19%.
International oil prices rose more than 1%, U.S. oil returned to $76 cloth oil broke $79, and European natural gas soared 20%
WTI February crude oil futures closed up $0.87, or 1.16 percent, at $76.08 a barrel. Brent's March crude futures closed up $1.2, or 1.54 percent, at $78.98 a barrel.
U.S. Oil WTI rose as high as $1.22 or 1.6% intraday, rising below $76, stopping its seven-game rally on December 31. International Brent rose as high as $1.47 or 1.9%, with a daily high above $79. Both oil prices are close to recovering all of their losses since the November 26 Omicron news, and Libyan crude oil production will fall to a new low in more than a year due to pipeline repairs, which also supports oil prices.
Investors focused on Tuesday's OPEC+ oil production meeting, and multiple people familiar with the matter revealed that the alliance will maintain plans to increase production by 400,000 barrels per day in February, and said that the impact of the Omilon strain on demand was mild and short-lived. OPEC's forecast for crude oil oversupply of 1.4 million b/d in the first quarter of this year is about 25% lower than its previous forecast of 1.7 million b/d, mainly due to weaker supply prospects from competitors.
While there are still concerns that the pandemic will dampen demand, UBS analyst Giovanni Staunovo's team believes that oil prices will continue to rise this year on top of a 50% surge in 2021. As crude oil and petroleum product prices benefit from a rebound in oil demand to higher levels than in 2019, the bank expects cloth prices to rise to a range of $80 to $90 in 2022.
European natural gas surged on the first trading day of the new year, with TTF benchmark Dutch gas futures halting an eight-game decline, rising 18.5% to €83.3/MWh at the end of the session, up 20% at one point in the session and forcing €85. Rising natural gas prices have pushed electricity prices higher again, with Germany rising nearly 4 percent to nearly 125 euros in the coming year. ICE EU Carbon Trading License futures rose 4.5% to €85.3/mt.
European natural gas stopped falling today and turned higher as Russia's gas transmission through Ukraine's key routes fell, once again leading to uncertainty about the safety of European gas supply in the winter months. At the same time, potential gas demand growth in Asia also exacerbates supply concerns, which could lead to a re-shift of LNG to Asia, leaving Europe once again short of fuel.
The expected rate hike put the dollar back above 96, the Turkish lira turned more than 3% higher, and Bitcoin lost $46,000
The basket of dollar indexes (DXY), which measures the greenback against six major currencies, rose 0.3 percent during the day, rising again above the 96 mark and recovering nearly half of its losses since Dec. 22. Safe-haven demand receded, with the yen falling briefly to 115.36 against the dollar, its lowest since the end of November.
The Turkish lira against the US dollar stopped falling and turned up in the US stock market, and once forced 14 during the Asian session, and the US stock market once again pressed up to the 13 mark. Inflation in Turkey rose more than 36% year-on-year in December, well above expectations and highest since September 2002, as the lira plunged late last year.
Bitcoin, the largest digital currency by market capitalization, fell more than 2% in 24 hours, losing the 47,000 and $46,000 marks in a row during the day, and also fell to the 200-day moving average. The second-largest Ethereum also fell nearly 3 percent, pushing down $3,700, with mainstream cryptocurrencies falling on Monday.
Stock and bond yields rose together, and gold retreated from a six-week high to force $1,800
Spot gold fell as deeply as $31 or 1.7% during the day, once losing the key integer level of $1800, giving back all gains since December 23, and earlier in the day touched a six-week high since November 27, with a daily high of $1832 at one point.
Gold fell 3.6% in 2021, the largest annual decline in six years since 2015, mainly due to the double pressure of US Treasury yields and the US dollar, and the rise in European and American stock markets also dampened safe-haven demand for gold. UBS analyst Giovanni Staunovo believes that rising interest rates and falling US inflation in 2022 will put downward pressure on gold, which may fall to $1650 at the end of the year.