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Most Asian stocks rose Tuesday as investors assessed the impact of omicron and U.S. equities at record highs. The yen fell to its weakest since 2017 against the dollar.
Japan and Australia advanced as they reopened after the holiday. A decline in technology stocks weighed on Hong Kong. U.S. futures edged higher after the S&P 500 ended at a record even as trading volumes remained light.
Chinese shares are headed for their worst start to the new year since 2019, as investors took profit on some of their most successful bets in 2021.
Benchmark Treasury yields steadied after climbing across the curve. The yield on the 10-year note topped 1.60% in its worst start to a year since 2009 as investors braced for Federal Reserve interest-rate hikes in 2022. The yen slid against all its Group-of-10 peers, and declined to 115.63 against the dollar.
Cautious Optimism
A string of new studies has confirmed the news the world was waiting for: Even as cases of the omicron variant continue to soar, the numbers of severe cases and hospitalizations have not. Five separate studies in the past week suggest omicron does not infect the lungs as easily as previous variants, seeming to prefer to reside in the upper respiratory tract. Of course, we’re not out of the woods yet, as worldwide cases hit 10 million in just one week. Even as infection rates reached a record high in the U.S., experts warn the true tally could be much higher; Tokyo reported its highest number of cases in almost three months; and Hong Kong’s omicron tally is creeping up after months with zero local infections.
Wall Street’s Bets
As 2022 begins, the overriding message from almost 50 financial institutions across Wall Street and beyond is that conditions still look good, but the rip-roaring rallies powered by the reopening are history. Growth will ease. Returns will moderate. Risks abound — but so do opportunities.
FTSE 100 live outlook prediction analysis for 4th January 2022
Well the bulls have started 2022 on the front foot and we are tantalisingly close to the 7500 level once again. That said we are just testing the 7460 resistance level that we had pencilled in at the back end of the year and in fact have already dropped off this overnight before clawing back to it. As such we could well see a dip and rise play out today, as the bears have a bit of an attempt here.
Traditionally the bullishness continues till the middle off January based on the typical seasonal pattern, so we might not see it get overly bearish till later win the month.
If we do get a small dip to start with today from 7460 then I am looking for a drop down towards the 7425 30m coral support, but also possibly the 200ema, daily pivot and 2 h support around the 7410 area – and we would like to see this hold for another leg higher.
The S&P bulls have also put in a decent shift to start the week and getting that back above 4800 bodes well for a push towards the 4825 resistance level. Above that 4852 is R3 and may well be seen in the next few sessions. The 2h S&P chart is now bullish with 4795 showing as decent support so the US bulls will be keen to defend any dips down to that area today.
Back to the FTSE100 and the 7405 level looks fairly key otherwise we may well slide down to the recent low at 7360 – a level which held well last week and may well do again. A break of that though and then the next daily support level at 7280 comes into play. However, as mentioned seasonally it doesn’t get too weak just yet.
I am feeling that 2022 may well be quite a volatile year as recession fears come to the fore, coupled with the ongoing Covid repercussions. Supply chain issues, cost of living squeeze, inflation to continue higher and so on are all likely to continue to play a part. That said, with inflation likely to remain elevated assets – physical and equities – may well be the best place instead of cash. Ergo we will see stock markets continue to see dips get bought. For me it remains a buy the dip market at least to start with this year, though I am mindful of strong economic headwinds this year.
So, can the bulls defend today and we get a push up toward the 7500 level where we have R3. Above that then the 7550 is the ultimate goal but may be a big ask for today – we have the top of the 10 day Raff channel here and a test of that would be good. The ASX200 had a decently bullish day and generally trended up, and with cable (GBPUSD) falling slightly the past few sessions that is helping the FTSE100 bulls.
Good luck today, keep an eye on 7425, 7410 and 7360 as the main supports. 7460, 7500 and 7550 as the main resistance levels. We may well get a weaker US session later especially off the news that they had the 1m covid cases in one 24hr period earlier….. Though this variant is mild it can cause disruption due to the absence levels as I expect you know!
7498 resistance next up…. #ftse #ftse100