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US stocks rise in post-holiday trading

US stocks edged up slightly in post-holiday trading on Monday, while analysts questioned whether favorable market conditions will continue to push Wall Street to all-time highs this year. continue in 2022 or not.

The broad S&P 500 stock index rose 0.9%, after closing record high on December 23 after weeks of volatility due to the Omicron coronavirus variant and the US Federal Reserve moved to reduce emergency stimulus measures.

The tech-focused Nasdaq 100 stock index rose 1.1%.

The S&P has rallied for more than a quarter this year, boosted by corporate earnings rebounding from the coronavirus recession in 2020 and bottoming interest rates sending investors flocking to equities.

US currency conditions still has a high capacity and recent economic data was strong. However, some Wall Street strategists expect the stock market to grow more muted next year, as the Fed raises borrowing costs to cope with the crisis. inflation increased driven by pressures on supply chains from pandemic restrictions as well as higher rents and energy prices.

“We are generally constructive on the U.S. equity outlook for 2022, although gains are expected to be lower than in previous years,” Citi strategist Scott Chronert wrote in a note to clients. before”. “Current inflation concerns imply that the Fed’s response will remain important to the direction of the market.”

Louis Gave, a Gavekal researcher, warned that Omicron could “destroy economies and lengthen supply chains”. But he also points to what he calls “encouraging” data in South Africa that suggest The new highly transmissible variant may be less likely to lead to hospitalization than Delta.

The Fed was poised to end its emergency stimulus package, where it bought about $120 billion in government and mortgage-backed bonds each month through the pandemic, in March. Central bank officials looking forward raise interest rates three times by 2022.

Yields on the benchmark 10-year US Treasury note, inversely proportional to the price of government debt securities, were flat at around 1.49% on Monday.

This debt instrument has relatively calm transaction This month as investors priced in a short-term rate hike won’t have much of an impact on yields on bonds, versus cash, over time.

However, government debt with shorter maturities has taken on the burden of betting on tighter monetary policy. Yields on the two-year Treasury note rose 0.03 percentage points to just under 0.72%, around the highest level since March 2020.

Elsewhere, Europe’s Stoxx 600 share index rose about 0.7%. Trading on London’s FTSE 100 has been halted over the holiday season.

The dollar index, which measures the US currency against six other currencies including the pound and the euro, was up 0.1%.

The pound inched 0.3% higher against the dollar to around $1.34 and gained 0.2% against the euro, buying just under 1.19 euros, as traders awaited a decision on coronavirus restrictions in the UK from UK Prime Minister Boris Johnson. The three administrative bodies of the country, Scotland, Wales and Northern Ireland have introduce again some measures.

The price of Brent crude, the oil benchmark, rose 3% to $78.68 a barrel.

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