WORLDWIDE: HEADLINES 

Global stocks end mixed after record-setting session 

European stocks rose on Tuesday while Wall Street shares closed mixed after another record-setting session in which investors shrugged off concerns over Omicron-driven travel disruptions and store closures. 

Asset classes from oil to equities have clawed back losses from late November, when the Omicron variant of COVID-19 sent investors scurrying for safety. 

A delay in Britain and France on imposing more COVID curbs before year-end also excited investors. As the worst fears over the impact of the variant have subsided, investors have returned to risk assets. 

MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 0.09% as it continued to hover near a record high hit last month, and the pan-European STOXX 600 (.STOXX) added 0.62% to end the session at a five-week high, heading for its best month since March this year. 

Markets are in the seasonal Santa Claus rally, with CFRA Research data showing the S&P 500 has on average risen 1.3% in the last five trading days of the year and first two days of the new year since 1969. 

“Investors are digesting the gains from the last three days… but there are concerns such as ‘How will the Omicron variant affect the market? Would that end up undoing the Santa Claus rally? What about the Fed raising interest rates, could that cause challenges for the year ahead?'” said Sam Stovall, chief investment strategist at CFRA Research in New York. 

Full coverage: REUTERS 

S&P 500 ends lower after four-day rally to record high 

The S&P 500 (.SPX) closed slightly lower after hitting a record intraday high on Tuesday, as a four-day rally lost steam in thin trading and investors weighed Omicron-driven travel disruptions and store closures. 

The Centers for Disease Control and Prevention (CDC) on Monday shortened the recommended isolation time for Americans with asymptomatic cases of COVID-19 to five days from the previous guidance of 10 days. 

The update follows approvals for new pills and more vaccines to fight COVID-19. It helped investors shrug off concerns over thousands of flight cancellations and Apple Inc (AAPL.O) shutting its New York stores due to surging cases, and put U.S. stocks on pace for monthly gains. 

“This is a holiday-shortened week. So daily movements will likely be exaggerated because of a low relative volume,” said Sam Stovall, chief investment strategist at CFRA Research in New York. 

Sevenof the 11 major S&P 500 sector indexes rose on Tuesday. Technology (.SPLRCT) and Communications Services (.SPLRCL) led declines. 

The Dow Jones Industrial Average (.DJI) rose 95.83 points, or 0.26%, to 36,398.21; the S&P 500 (.SPX) lost 4.84 points, or 0.10%, to 4,786.35 and the Nasdaq Composite (.IXIC) dropped 89.54 points, or 0.56%, to 15,781.72. 

Full coverage: REUTERS 

WORLDWIDE: FINANCE/MARKETS 

Asia shares slip as investors ready for end of 2021 

Asian stocks slipped on Wednesday, following a mixed Wall Street session as the region’s investors positioned their portfolios for the new year and continued to grapple with increasing global numbers of Omicron coronavirus cases. 

MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) lost 0.25%, after six sessions of gains, following volatile U.S. trade. 

There were losses in Hong Kong (.HSI), down 0.6% hurt by declines in mainland tech stocks while Chinese blue chips (.CSI300) shed 0.25%. 

Japan’s Nikkei (.N225) slid 0.58% Wednesday after hitting a one-month high on Tuesday. 

But in Australia, the ASX 200 (.AXJO) was up 1% early in the session even though the country’s most populous state New South Wales announced 11,201 new coronavirus cases.  

Volatile markets are common in late December as fund managers prepare to rule off their books for the year and holidays thin trading volumes in some major markets like Australia. 

“Typically, at this time of year global investors are starting to rethink their portfolio positions and they are looking at the risks going into 2022,” said Jim McCafferty, Nomura’s joint head of APAC equity research. 

“Inflation is rearing its head in Europe and the U.S., it’s more contained in Asia, so people are looking to have their portfolios positioned to mitigate inflation. In equities, people are looking at companies that can pass on any future price rises and firms with dividend growth as one way investors can generate income.” 

Full coverage: REUTERS 

Dollar inches up in thin holiday trading 

The dollar firmed slightly in early Asian trade on Wednesday as a recent rally in shares showed signs of petering out, but holiday-thinned trading meant markets were showing little real direction. 

The euro lost 0.14% overnight to $1.1307 and the pound slipped from a five-week high, helping to take the dollar index, which measures the greenback against major peers, to 96.165 from as low as 95.958 on Friday. 

But with many traders having taken time off for Christmas or the end of the year, analysts said it was hard to read too much into the moves. 

“Things are mostly noise right now, though we are probably seeing a soft risk-on/risk-off dynamic going on with stocks down slightly, and the dollar has caught a bid on the inverse of that,” said Kyle Rodda, an analyst at IG Markets. 

He said longer term, however, he was bullish on the greenback due to approaching rate hikes by the Federal Reserve and the apparent reduced chance of future lockdowns in the United States. 

The Fed is widely expected to begin hiking rates before several other major central banks such as the European Central Bank, and this has helped the dollar index to have its best year in 2021 since 2015. 

The dollar was also supported by a rise in two-year Treasury yields which hit 0.758% on Tuesday, a near two-year high, before slipping marginally to 0.7461%. 

Full coverage: REUTERS 

Oil firms, near highest since late November on risk appetite 

U.S. oil rose for a sixth consecutive session on Wednesday while Brent gained more ground with a broad-based rally in global markets supporting prices. 

The benchmark Brent crude rose 23 cents, or 0.3%, at $79.17 a barrel by 0101 GMT. U.S. West Texas Intermediate (WTI) crude added 21 cents, or 0.3%, at $76.19 a barrel. 

Both contracts are trading near their highest levels in a month, aided by strength in equities. 

Asset classes from oil to equities have clawed back losses from late November, when the Omicron variant of COVID-19 sent investors scurrying for safety. 

A delay in Britain and France on imposing more COVID curbs before the year-end also excited investors. As the worst fears over the impact of the variant have subsided, investors have returned to risk assets. 

Omicron-induced staff shortages led to thousands of flight cancellations over the Christmas weekend in the United States. 

Oil prices were underpinned by three oil producers declaring forces majeures this month on part of their oil production because of maintenance issues and oilfield shutdowns. 

Investors are awaiting an OPEC+ meeting on Jan. 4, at which the alliance will decide whether to go ahead with a planned production increase of 400,000 barrels per day in February. 

Full coverage: REUTERS