The S&P 500 hit a new all-time high. Mass protests against vaccine restrictions are worldwide

On Monday, the US stock market continued confident growth, with the S&P 500 index renewing its all-time high. By the time the stock exchange closed, the Dow Jones Industrial Average (US30) increased by 0.98%, the S&P 500 (US500) added 1.38%, and the technology index Nasdaq Composite (US100) jumped by 1.39%.

Many analyst houses are beginning to revise their growth forecasts downward due to the spread of the Omicron strain. For example, analysts at Moody's Analytics lowered their forecast for the US GDP growth in the first quarter from 5.2% to 2.2%. Goldman Sachs expects the Fed to raise interest rates three times next year starting from March and expects the US economy to grow only by 3.5%. But according to analysts at JPMorgan, there is no reason to fear that the stock market rally will end anytime soon. To support their arguments, they note that despite the record growth of the S&P 500, the main contribution to it was made only by a few companies with the largest capitalization.

Because of the pandemic and bad weather, US airlines canceled more than 3,000 flights last week and rescheduled several thousand more. In total, more than 1,000 domestic flights in the US were canceled yesterday. This will undoubtedly negatively impact airline numbers for the fourth quarter of 2021.

US chief virologist Anthony Fauci said the government should consider banning domestic air travel for those who are unvaccinated as a way to boost vaccination rates.

Yesterday, Europe's main stock indices closed in the green zone. Germany's DAX (DE30) added 0.5%, France's CAC 40 (FR40) gained 0.8%, and Spain's IBEX (ES35) increased by 0.7%. A banking holiday was in the UK yesterday. Investors are keeping a close eye on sickness rates in European countries and are worried that new surges could lead to a decline in economic activity in the region. France's prime minister expects the vaccine pass law to be introduced from Jan. 15.

From the Middle East, in Europe, to South America, mass protests have begun against mandates and restrictions because of vaccinations. In Israel, protests were organized in anticipation of the new restrictions since Israel plans to introduce a 4th dose of vaccination to combat the growing number of infections. In the Austrian capital, demonstrators marched with "We are the world" in response to mass nationwide testing. In Germany, in Munich, police, and demonstrators clashed in the streets. In Spain, there was a mass protest in the city of Bilbao against the Covid vaccine pass. In Argentina, hundreds of people joined a "freedom rally" against mandates and vaccine passes.

On Monday, oil prices increased again and are traded near a one-month high. Analysts are inclined that Omicron won't have much of an impact on fuel demand. Investors are now waiting for the OPEC+ meeting on January 4.

Japan put up for sale more than 600 thousand barrels of oil from strategic reserves.

On Tuesday, the main Asian indices were rising during the trading, following the dynamics of the US stock indices. The biggest gain showed Japan's Nikkei 225 Index (JP225), which gained 1.37% after the opening. Japan's unemployment rate in November increased for the first time in six months to 2.8% from 2.7% in October. Japan's industrial production rose by 7.2% in November. Analysts had expected a less strong amount of 4.8%. Last month, industrial output peaked on a rebound in activity in Japan's auto sector due to easing problems in component supply chains. Auto production jumped by 43.1% in November.

Yesterday, a head of famed troubled real estate developer Evergrande said that the company aimed to complete 39,000 homes in 115 projects across China in December. Hong Kong's Hang Seng Index (HK50) is traded near its opening price.

Main market quotes:

S&P 500 (F) (US500) 4,791.19 +65.40 (+1.38%)

Dow Jones (US30) 36,302.38 +351.82 (+0.98%)

DAX (DE40) 15,835.25 +78.94 (+0.50%)

FTSE 100 (UK100) 7,372.10 0.00 (0.00%)

USD Index 96.09 +0.07 (+0.08%)

Important events for today:
  • - Japan Unemployment Rate (m/m) at 01:30 (GMT+2);
  • - Japan Industrial Production (m/m) at 01:50 (GMT+2).

by Justforex, 2021.12.28

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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