Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Global Market Report - 24 December

Lewis Jackson  |  24 Dec 2021Text size  Decrease  Increase  |  
Email to Friend

Australia

The ASX is poised to jump as the S&P 500 notches a new record.

The Australian SPI 200 futures contract was up 50 points or 0.7% at 7342 near 8.00 am AEST on Friday, suggesting a positive start to trading.

US stock indexes rose and Treasury yields remained higher Thursday after figures showed that consumer-spending growth cooled last month.

The S&P 500 was up 0.6%, a new closing high. The index had climbed for a second day Wednesday as strong economic data helped ease investors' concerns about the risks posed by Covid-19 and inflation. The tech-focused Nasdaq Composite rose 0.2% Thursday, and the Dow Jones Industrial Average added 0.5%.

The Australian dollar was buying 72.47 US cents near 8.00am AEST, up from the previous close of 72.13. The WSJ Dollar Index, which measures the US dollar against 16 other currencies, slipped to 89.84.

Locally, S&P/ASX 200 closed 0.3% higher at 7387.6, notching a third day of gains. While the technology sector finished in the red, the benchmark index was helped along by gains in healthcare and industrial stocks.

Cimic gained 1.4%, while Ansell was up 4.0% and Sonic Healthcare rose 1.3%. Bega Cheese shares closed 10.3% lower after issuing a trading update that said farm milk supply in Australia is flat to declining.

Investing Compass
Listen to Morningstar Australia's Investing Compass podcast
Take a deep dive into investing concepts, with practical explanations to help you invest confidently.
Investing Compass

Private health insurer Nib rose 1.3% after saying it would consider deferring premium rises, while peer Medibank Private closed 0.3% lower after saying it would defer insurance-cover premium increases for five months.

Afterpay closed 2.4% lower after yesterday posting its strongest one-day gain since early August.

Gold futures rose 0.4% to $US1810.10 an ounce; Brent crude extended its rally with a 2.1% jump to $US76.90 a barrel; iron ore gained 2.4% to US$126.35 a tonne.

The yield on the Australian 10-year bond edged up to 1.58%, with the US 10-year Treasury yield advanced to 1.49%.

Asia

Chinese stocks ended the session higher, following overnight gains in the US market. However, analysts warn that technical analyses suggest the market lacks substantial upside momentum in the near term. The benchmark Shanghai Composite Index rose 0.6%, while the Shenzhen Composite Index added 0.2%. The ChiNext Price Index edged up 0.1%. The renewable energy sector helped fuel the gains after new official data showed surging wind power generation in November and expectations of high solar panel installations in 2022.

Hong Kong stocks ended higher for the third straight session, extending their recovery from Monday's steep loss. The benchmark Hang Seng Index rose 0.4%. Tencent led gains on the index with a 4.2% jump after the Chinese tech giant said it will sell most of its stake in e-commerce company JD.com and distribute the proceeds as a special dividend. Renewable-energy companies also rose, as new official data showed upbeat November wind-generation volume.

Japanese stocks ended higher, led by gains in energy and airline stocks, as investors trimmed bets that the Omicron variant will further disrupt an economic recovery. Oil explorer Inpex advanced 2.5% and ANA Holdings gained 2.3%. The Nikkei Stock Average rose 0.8%.

Europe

European stocks continued their advance as covid fears abated and AstraZeneca said its vaccine booster is effective against Omicron. The pan-European STOXX 600 index, which tracks the performance of companies across 17 European companies rose 1%.

In London, the FTSE 100 gained 0.4% as evidence grows that the Omicron variant of the coronavirus is less dangerous than previous variants. This eases concerns about potential disruption to the economy via renewed restrictions, analysts say.

North America

US stock indexes rose and Treasury yields remained higher Thursday after figures showed that consumer-spending growth cooled last month.

The S&P 500 was up 0.6%, a new closing high. The index had climbed for a second day Wednesday as strong economic data helped ease investors' concerns about the risks posed by Covid-19 and inflation. The tech-focused Nasdaq Composite rose 0.2% Thursday, and the Dow Jones Industrial Average added 0.5%.

Fresh data from the Commerce Department showed that US consumer spending for November increased 0.6% from the prior month. The US personal-consumption expenditures price index excluding food and energy, a gauge of inflation, in November rose 4.7% from one year earlier.

Strong inflation data helped prompt the Federal Reserve earlier this month to accelerate a winding down of its pandemic-era stimulus. Investors and central bankers are worried that the Omicron variant could add additional pressure to inflation.

"Inflation is centre stage for a lot of people," said Andrew Cole, head of multiasset in London at Pictet Asset Management. "Inflation is widely expected to peak, if not in the first quarter, the first half of next year. You might have to wait until the second half of next year for central banks to relax."

Higher inflation and low yields on government bonds have dissuaded some investors from holding them this year, due to diminished returns on keeping them to maturity. The yield on the benchmark 10-year Treasury note ticked up to 1.492% Thursday from 1.457% Wednesday. Yields rise when prices fall.

First-time applications for unemployment benefits, a proxy for layoffs, held steady at 205,000 in the week ended 18 Dec, unchanged from one week earlier.

US regulators cleared use of a Covid-19 pill from Merck and partner Ridgeback Biotherapeutics LP, the latest easy-to-use therapy that infected people can take to keep out of the hospital. Merck shares fell 0.3%. Novavax, whose shares fell 2.5% after gaining in premarket trading, said its two-dose Covid-19 vaccine demonstrated "strong immune responses" against Omicron and other variants.

This week's gains in the market suggest investors remain focused on the pandemic's trajectory, said Greg Bassuk, chief executive of AXS Investments, an asset-management firm for alternative investments. Developments in Covid-19 treatments and vaccines seem to be contributing to expectations for an economic recovery in 2022 despite the spread of the Omicron variant, Mr. Bassuk added.

"We believe Covid is still the investor narrative," Mr. Bassuk said.

Mr. Bassuk said Thursday's gains in travel and hospitality stocks reflect investors' optimism for the containment of the pandemic. Shares of hotel chain Marriott International gained 1.9%, and United Airlines Holdings rose 0.9%.

Investors seem to be positioning themselves for a rebound in global travel next year, depending on developments with Covid-19 case rates and policy changes, said Paul Baiocchi, chief ETF strategist at SS&C ALPS Advisors.

"There is an opportunity for increased travel spending," said Mr. Baiocchi, who expects a rotation into value from growth stocks next year.

is a reporter and data journalist with Morningstar. Tweet him @lewjackk or get in touch via email

AAP logo

© 2022 Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend