Yesterday, by the close of the stock exchange, the S&P 500 (US500) increased by 1.0%, the Dow Jones Industrial Average (US30) gained 0.7%, and the Nasdaq (US100) added 1.2%. Positive statistical data provided significant support to the market. The US consumer confidence index increased to 115.8 in December, well above the consensus forecast of 111.0. The US GDP growth for the quarter was 2.3% (2.1% was expected). The US existing home sales increased by 1.9% in November. Sentiment for a rebound in stocks was also boosted by news that Pfizer’s COVID-19 tablets have received emergency approval in the US. Pfizer’s “Paxlovid” is the first approved COVID-19 drug for home use.
Tesla stock jumped more than 7% after CEO Elon Musk said he sold “enough stock” to meet his goal of selling 10% of his stake in the company.
The European stock indices also rose on Wednesday. France’s CAC 40 (FR40) gained 1.2%, Germany’s DAX (DE30) added 1%, Britain’s FTSE 100 (UK100) increased by 0.6%, and Spain’s IBEX 35 (ES35) added 0.9%. In European countries, there is an increase in the number of diseases of COVID-19. In the past 24 hours, there were 106,122 new cases of infection in the UK. In Spain, in the province of Madrid, a record number of cases since the beginning of the pandemic has been recorded on Tuesday. Media report that in pharmacies ended tests on COVID-19 and health centers are overflowing with people sickened by the coronavirus. The government of Catalonia has already imposed restrictions on some businesses and public places. Portugal has imposed new restrictions on the service sector. On December 27, the French government will meet in an emergency session to consider the introduction of a “vaccine pass”. Analysts expect Eurozone statistics for the fourth quarter to be weak.
Eleven associations of European energy-intensive industries (from cement to steel and from fertilizer to paper mills) issued a joint statement warning of “unbearably high energy prices” and production stoppages. The European energy crisis continues.
Germany and Israel are preparing to introduce the 4th dose of vaccination for the population. The World Health Organization does not recommend that all children and adolescents be vaccinated against coronavirus because there is little chance of severe disease in these age groups. This follows a statement about COVID-19 booster vaccinations on the organization’s website.
The US oil inventories decreased by 4.7 million barrels for the week. Analysts were expecting a decline of 2.8 million barrels. This is the second major decline. A supply shortage almost always pushes prices up.
The dollar index is declining amid Pfizer’s approval of a new COVID-19 drug. Investors are shifting their funds to riskier assets, which causes the stock market to rise and, consequently, the dollar index to fall. In turn, a decrease in the dollar index contributes to a decline in government bond yields and higher gold and silver prices.
On Friday, Japan’s government will present its annual budget with $943 billion in spending for the fiscal year beginning next April, further adding to its heaviest debt burden. Major budget spending will be on combating COVID-19, for social security to support the rapidly aging population and the largest military spending in Japanese history to deal with threats from China. Japan’s GDP will reach a record $4.9 trillion next year.
Singapore’s consumer price index increased to 3.8% (previous value 3.2%, forecast 3.4%). This is the highest inflation rate in the last 9 years.
Meanwhile, the Chinese city of Xi’an has tightened restrictions to curb the latest outbreak of the virus. Omicron has become the dominant strain of COVID-19 in Australia, and New South Wales has a record number of cases every day.
Main market quotes:
- S&P 500 (F) (US500) 4,696.56 +47.33 (+1.02%)
- Dow Jones (US30) 35,753.89 +261.19 (+0.74%)
- DAX (DE40) 15,593.47 +146.03 (+0.95%)
- FTSE 100 (UK100) 7,341.66 +44.25 (+0.61%)
- USD Index 96.09 -0.41 (-0.42%)
Important events for today:
- Japan BoJ Governor Kuroda Speaks, at 03:00 (GMT+2);
- Singapore Consumer Price index (m/m) at 07:00 (GMT+2);
- US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
- US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
- US PCE price index (m/m) at 15:30 (GMT+2);
- Canada GDP (q/q) at 15:30 (GMT+2);
- US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2);
- US New Home Sales (m/m) at 17:00 (GMT+2);
- US Natural Gas Storage (w/w) at 17:30 (GMT+2).
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