Stock exchange investors in the USA may have reasons to rejoice today. American indices rose on Thursday for the third consecutive session. The S&P gained 0.6 percent and reached a record high of 4726 points, the Dow Jones added almost 200 points and closed at 35951 points, and the Nasdaq Composite rose 0.9 percent.
In the week's recap, all three major averages end the week on a high note, with the Nasdaq Composite jumping 2.8 percent, the S&P rising 2.2 percent, and the Dow Jones adding 1.7 percent.
What could justify the optimism on the stock markets? Fears that the omicron variety will derail economic growth are subsiding, and President Joe Biden said the U.S. will not go back to reimposing restrictions. Research in South Africa, moreover, has again confirmed that the omicron variant is less dangerous than previous strains of coronavirus, albeit more contagious.
Inflation the highest in nearly 40 years
Before Christmas we learned important data from the American economy. For the most part, they seem encouraging, but the worrying thing is the rise in prices.
US consumer spending has been rising for 6 months in a row, but slowed last month compared to October. Annual PCE inflation rose to 5.7 percent, the highest level in 39 years. The number of unemployment claims remained below pre-pandemic levels last week.
Oil prices reflect receding fears
Optimism also seems to be returning to the oil market. WTI futures closed Thursday at $73.79 per barrel, up 1.42 percent and ending the week up 4.34 percent.
Oil prices appear to be rising this week as fears over a new variant of the virus recede, with early research suggesting that it carries a lower risk of hospitalization and causes a milder course of illness. Reports also showed that antiviral tablets from U.S. drugmakers Merck and Pfizer were effective against omicron.
Signs of strong demand also helped boost oil prices. U.S. crude inventories fell more than expected. Soaring natural gas prices in Europe and Asia also fueled expectations that some industries would switch from gas to oil. U.S. oil rigs rose to their highest level since April 2020, heralding increased production in the coming months.
Have a healthy and peaceful holiday season!
Markets are already moving into the Christmas-New Year period of reduced liquidity characteristic of non-trading days, and instead of stocks, currencies or commodities, investors may already be thinking about meeting loved ones.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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