(Boursier.com) – The New York Stock Exchange started the year 2022 on a very good footing, Monday, with the DJIA and the S&P 500 even setting new historical records. Investors are betting that the Omicron variant of the coronavirus will not weigh heavily or sustainably on the global economic recovery. Oil prices rose, and interest rates rose in anticipation of a Fed monetary policy tightening, possibly before mid-2022.
At the close, the Dow jones gained 0.68% to 36,585 points, while the broad index S&P 500 advanced 0.64% to 4,796 pts, new highs at the close for both indices. the Nasdaq Composite, rich in technological and biotech stocks, jumped 1.2% to 15,832 pts, supported in particular by You’re here, which soared by 13.5%! Nasaq is now back to 1.4% of its last record, which dates back to November 19 at 16,057 pts.
In 2021, the DJIA climbed 18.7%, the S&P 500 jumped 26.9% and the Nasdaq climbed 21.4%. All three indices were supported by the economic recovery that followed the recession triggered by the Covid-19 pandemic in 2020.
Among the stocks in view this Monday, You’re here jumped 13.5% after reporting higher than expected deliveries in Q4 despite supply chain problems. Another electric vehicle manufacturer, Chinese NIO also climbed 5.6% thanks to higher than expected deliveries. Apple climbed 2.5%, and crossed $ 3 trillion in market capitalization for the first time in the session, before falling slightly below at the close.
OPEC + should maintain its policy of gradually increasing production
Oil has also started 2022 in the green, in the hope of solid demand in 2022, and on the eve of the monthly OPEC + meeting, which should continue its policy of gradually increasing its quotas. The barrel of American light crude WTI Monday night gained 1.2% to $ 76.08 (February Nymex futures contract), while the Brent de Mer du Nord advanced 1.54% to $ 78.98 (March contract).
According to a technical report that Reuters was able to consult yesterday, OPEC + relativizes the impact of the Omicron variant on aggregate demand by describing it as “moderate and short-lived” while maintaining its economic outlook unchanged.
In this favorable risk-taking environment, investors bought stocks and oil, and sold bonds and other safe havens like gold, based on studies showing that the Omicron variant of the coronavirus is less dangerous. than the previous variants, despite its greater transmissibility and an increase in the number of hospitalizations observed in Europe and the United States.
Omicron, temporary negative effects on the economy?
The spread of Omicron in the United States, however, continues to result in thousands of flight cancellations and is forcing some businesses and schools to consider temporary shutdowns. CNBC also notes that several major Wall Street banks asked their employees to work from home during the first weeks of January. Finally, American retailers are forced to close for lack of available workers.
Dr Anthony Fauci, the White House’s senior health adviser, said on ABC (‘This Week’) Sunday that US health officials may soon update the guidelines to include a recommendation for testing to report when a person has already tested positive. for the Covid could leave isolation. Fauci believes the US should focus less on increasing Covid cases and more on hospitalizations and deaths, which have seen much smaller increases.
The T-Bond at 30 again above 2%
On the bond markets, prices fell, causing rates to rise (which move in the opposite direction to prices). The performance of T-Bond at 10 years jumped 13 basis points Monday night to rise to 1.63%, the highest in nearly 6 weeks. the yield of “30 years” jumped 14 bps, climbing above 2% (2.03%) for the first time since November 23. In Europe, the yield of German Bund at 10 years climbed 6 bps to -0.12% to a depuyis high in early November.
On the foreign exchange market, the dollar index Monday night gained 0.26% to 96.22 pts against a basket of currencies, while the euro gave up 0.62% to $ 1.1297. Gold fell 1.6% to $ 1,799.80 an ounce on Comex (February contract), falling back below the $ 1,800 level. the bitcoin listed Monday night around $ 45,846, down 2.5% over 24 hours, according to the site Coindesk.
Fed rate hikes expected in March 2022
According to data compiled by CME Group, the likelihood of the US Federal Reserve increasing its key rates from next March is now in the majority, at 57.2%, against only 26% on December 3. The Fed will publish the Minutes of its last meeting on Wednesday, during which it decided to accelerate the end of its asset purchase program (now scheduled for the end of March). It had also indicated in its projections that it planned to hike its rates at least three times this year to support the recovery and curb the surge in inflation.
Among the macroeconomic indicators expected this week are the employment figures for December, expected on Friday.
This Monday, the markets took note of the final activity figures in December. The PMI manufacturing index thus established itself at a solid level of 57.7, close to the consensus (57.8) and its flash reading (57.8). In addition, construction spending rose 0.4% in November over one month, against 0.6% market consensus and after 0.4% in October. On a year-over-year basis, these construction spending climbed 9.3%.
Investors have shown a certain indifference to the announcement of the suspension of trading in shares and structured products of China Evergrande Group Monday on the Hong Kong Stock Exchange. The over-indebted Chinese real estate giant has struggled for months to avoid default, posing the risk of a crisis on the entire Chinese real estate sector.
VALUES TO FOLLOW
You’re here (+ 13.5%!) Posted an impressive performance in the last quarter of 2021. In the fourth quarter, Elon Musk’s group achieved production of over 305,000 vehicles and deliveries of over 308,000 vehicles. The Model 3 and Y represent 292,731 units produced and 296,850 vehicles delivered. The Model S and X account for 13,109 units produced and 11,750 deliveries. In 2021, the group delivered more than 936,000 vehicles, 936,172 to be precise, and produced 930,422 units. “Thank you to all our customers, employees, suppliers, shareholders and supporters who helped us have a great year,” comments the group now based in Austin, Texas.
You’re here recorded, despite shortages, historic quarterly deliveries that clearly exceeded market expectations. The manufacturer has stepped up production in China despite the global shortage of semiconductors. Quarterly deliveries, at 308,600 vehicles, should be compared with a consensus of around 263,000 vehicles. Tesla thus aligns its sixth consecutive quarter of record deliveries. Quarterly shipments jump about 70% year-on-year and nearly 30% from the third quarter of 2021. Tesla has ramped up Chinese production, despite regulatory pressure and the global chip shortage. Over the year, deliveries rose 87% to 936,172 units.
Apple (+ 2.5% to $ 182.01) became on Monday the first group in the world to cross the $ 3 trillion market capitalization, although this record was not confirmed at the close. During the session, the share of the apple firm thus reached $ 182.88, which gave it the total stock market “weight” of just over $ 3,000 billion. The title must exceed $ 182.86 to hold the $ 3,000 billion.
Investors see Apple as a bit of a safe haven, stainless regardless of economic conditions. They believe that the American smartphone giant, based in Cupertino, California, is well positioned to take advantage of several growth engines of the economy, including the rise of telework, distance education and digital entertainment (streaming, metaverse …)
Pfizer (-4%) consolidates on its historic highs, after having climbed last year of 60%. Israeli Prime Minister Naftali Bennett said yesterday that people over 60 and medical staff will receive a second Covid-19 booster dose in the face of the upsurge in contamination with the Omicron variant. The increase in the number of cases could lead Israel to collective immunity, said the director general of the Ministry of Health. In Israel, the spread of the variant was initially limited, but is now accelerating and could reach a high in three weeks. Health Director General Nachman Ash believes this could lead the country to herd immunity, but adds that he prefers to achieve it through large-scale vaccination.
In addition, let us note that Belgium will buy from the Americans Pfizer and Merck 10,000 doses of their respective antiviral treatments for covid.
AT&T (+ 3.3%) and Verizon (+ 0.9%), two US telecommunications giants, on Sunday refused a further two-week postponement of the deployment in the United States of their services scheduled for January 5, in the C band of 5G, even if the sector of aviation fears disturbances linked to the use of this new frequency band. The FDA, the US government agency responsible for controlling civil aviation, requested this postponement. Telecom operators have instead offered not to deploy 5G services around airports for six months, and to limit deployments in the coming week.
American Airlines (+ 4.4%), Delta Air (+ 3.1%), United Air (+ 3.9%) or Southwest (+ 2.7%) progressed despite numerous cancellations of flights linked to the coronavirus. More than 4,000 flights were canceled worldwide on Sunday, more than half of which in the United States, due to the increase in Covid-19 cases and bad weather conditions. According to data from the flight tracking site FlightAware.com, the canceled flights included more than 2,400 flights originating in or within the United States. Globally, more than 11,200 flights have been delayed.
Robinhood (+ 3.8%) benefited from the announcement of the acquisition of approximately $ 10 million of shares of the mobile broker (563,570 shares) by ARK Invest, Cathie Wood’s investment firm well known for its daring bets.