- First potential signs of easing inflation could be appearing in Japan
- S&P 500 notches 69th record of the year
Key Events
Even amid spiking Omicron cases worldwide, US futures for the Dow Jones Futures, S&P 500, NASDAQ and Russell 2000, as well as European equities extended their Santa Claus rally on Tuesday as they all tracked Monday's robust Wall Street session higher.
Still, safe havens remain in play: Treasury yields edged lower and gold gained.
Global Financial Affairs
All four US futures contracts were green this morning. Contracts on the NASDAQ 100 as well as the Russell 2000 both led, providing an unusual tandem play earlier Tuesday, though futures on the Russell 2000 have since retreated while NASDAQ contracts pushed higher.
Futures on the S&P 500 extended gains after the underlying index hit its 69th record close this year during yesterday's New York trade.
European stocks advanced today, with travel and leisure companies rebounding from yesterday's selloffs, triggered by thousands of canceled flights over the weekend and with storms exacerbating a sector already short-staffed because of accelerating COVID-19 outbreaks.
This is the fifth daily advance out of six for the pan-European STOXX 600 Index. It's now within 0.8% of its Nov. 17 record close.
China's Shanghai Composite rose less than 0.4% earlier today as local regulators clarified rules for overseas IPOs.
Other Asian benchmarks saw stronger gains on Tuesday. Japan's Nikkei popped 1.37%. The index is riding a rally in technology stocks after Japan's Industrial Production jumped 7.2% in November, the fastest pace on record for the country, helped by a strong return to car production on easing global supply chain bottlenecks. Could this loosening of the supply traffic jam create a drop in inflation?
Carmaker shares in Europe also accelerated on Tuesday. Since people purchase cars when the economy is strong, it could be regarded as sign of investor optimism. But many of today's new cars are also highly technical in nature, so though the shares might have once been considered value oriented, there's now a growth component involved as well.
During Monday's US trading, stocks advanced for the fourth day in a row. Light volume coupled with holiday cheer appears to be helping investors ignore escalating coronavirus cases both in the US and around the world.
Even with the S&P 500 Index notching its 69th record close in 2021, it was the NASDAQ 100 that outperformed, adding 1.6% of value.
Moreover, the S&P 500's rally was primarily propelled by mega tech shares, including Apple's (NASDAQ:AAPL) record close and Microsoft's (NASDAQ:MSFT) near-record close.
Meta Platforms (NASDAQ:FB) and Tesla (NASDAQ:TSLA) also vaulted, with the EV manufacturer capping it's strongest four day run since March. However, from a technical perspective, TSLA shares may be running out of steam.
The stock retreated after nearing the top of its falling channel.
Yields, including for the 10-year Treasury note, wavered on Tuesday.
The benchmark note's earlier decline confirms the top of a symmetrical triangle, whose completion will help break out a double-top, supported by the 200 DMA. At time of publication the yield had ticked marginally higher.
The dollar slipped, retesting the bottom of an ascending triangle.
This move would be considered bullish upon an upside breakout.
Gold climbed to its highest level since Nov. 19.
The yellow metal may have completed a rounding bottom, crossing above the 200 DMA. A conservative trading approach would be to wait for the price to close above the $1,819.30 mark, the highest point within the formation.
Bitcoin fell below the $50K level once again.
The number one cryptocurrency by market cap may have confirmed the resistance of the broken uptrend line.
Oil continued its rally for a fifth day, moving above $76 as it nears a monthly high.
WTI has extended the upside breakout of an ascending triangle.
Up Ahead
- CB Consumer Confidence figures are released in the US on Tuesday
- US Pending Home Sales for November print on Wednesday
- Weekly US Initial Jobless Claims are published Thursday
Market Moves
Stocks
- The Stoxx Europe 600 rose 1.00%
- Futures on the S&P 500 were up 0.26%
- Futures on the NASDAQ 100 rose 0.52%
- The MSCI Asia Pacific Index is up 0.8%
- The MSCI Emerging Markets Index rose 0.5%
Currencies
- The Dollar Index slipped, down 0.07%
- The euro was little changed at $1.1323
- The Japanese yen was steady at 114.86 per dollar
- The offshore yuan was little changed at 6.3745 per dollar
- The British pound was flat at $1.3435
Bonds
- The yield on 10-year Treasuries was little changed at 1.47%
- Germany's 10-year yield advanced one basis point to -0.23%
Commodities
- WTI crude rose 0.8% to $76.10 a barrel
- Brent crude moved past $79.00
- Spot gold rose 0.2% to $1,817.48 an ounce