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US Indices Are Going For Records And Oil Is Stable

Yesterday, the US stock market traded without a single trend. The S&P 500 index (US500) decreased by 0.1%, the Nasdaq technology index (US100) lost 0.56%, while the Dow Jones Industrial Average (US30) gained 0.26% and rose for the fifth straight trading session, the longest uninterrupted period of growth in two months. Since the beginning of the current year, the Dow Jones (US30) has gained nearly 19%, the S&P 500 (US500) added more than 27%, the Nasdaq (US100) increased by 22.5%. Meanwhile, the S&P 500 index showed a larger gain for 2021 than the Nasdaq index for the first time since 2016.

On Monday, the Centers for Disease Control and Prevention (CDC) reduced the recommended isolation time for Americans with asymptomatic cases of COVID-19 infection to five days from 10 days previously. The CDC has issued new recommendations, as well as the approval of new pills and vaccines against COVID-19. This helped investors not respond sharply to the cancellation of thousands of flights and the closure of Apple stores due to increased illness among employees.

European stock indices mostly rose yesterday. Germany’s DAX (DE30) increased by 0.81%, France’s CAC 40 (FR40) gained 0.57% and Spain’s IBEX (ES35) added 0.77%. Spain’s retail sales index jumped by 4.9% in November. The sales did not grow four months in a row. The ECB began to reduce the pace of buying assets. These are the first steps toward ending the PEPP program next year and raising the issue of an interest rate hike. But analysts agree that the ECB will not raise the rates before 2023.

On Tuesday, Asian stock indexes were mixed and are decreasing at the opening on Wednesday. Traders negatively weigh the economic growth risks associated with the Omicron virus outbreak and the latest regulatory tightening in China. In Asia, there are relatively few cases of infection with a strain Оmicron compared to European countries and the United States. Despite this fact, investors are growing concerned that the rise in the disease will lead to lockdowns and new problems in supply chains. But the Australian stock market, which opened on Wednesday for the first time since the Christmas holiday, saw strong gains. The Australian ASX 200 Index (AU200) jumped by 1.21% from the open.

The data from the American Petroleum Institute showed that US crude oil inventories fell by 3.1 million barrels last week, which was in line with analysts’ expectations. The oil keeps its upward trend as Omicron risks to demand decrease while inventories are also declining, causing a weak deficit. The US Department of Energy will release its report on crude oil inventories today.

The number of tankers carrying gas from the US to Europe has increased by a third. This suggests that Europe does not have enough reserves to pass the heating season.

Main market quotes:

  • S&P 500 (F) (US500) 4,786.35 −4.84 (−0.10%)
  • Dow Jones (US30) 36,398.21 +95.83 (+0.26%)
  • DAX (DE40) 15,963.70 +128.45 (+0.81%)
  • FTSE 100 (UK100) 7,372.10 −1.24 (−0.02%)
  • USD Index 96.16 +0.07 (+0.07%)

Important events for today:

  • US Pending Home Sales (m/m) at 17:00 (GMT+2);
  • US Crude Oil Inventories (w/w) at 17:30 (GMT+2).
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