Business

Christmas rally seems unlikely


TOPICS DISCUSSED IN THIS MARKET BRIEFING:

  • LEuropean stock exchangesstart to rise again
  • Wall Street penalized by Omicron
  • Graph of the day – CAC 40 : a consolidation in a triangle

European stock markets are on the rise

European stock exchanges started to rise again at the start of Tuesday after being penalized the day before by uncertainties about the pace of economic growth in the face of the spread of the Omicron variant.

The increase in COVID-19 cases around the world, the entry into containment of the Netherlands and doubts about the strategy other countries could adopt to slow the rapid spread of the Omicron variant have led investors to withdraw of the equity market.

The risk of failure in the US Congress of an investment plan of 1.750 billion dollars wanted by Joe Biden also weighed on the trend, both in the United States and in Europe.

European indices rose after being affected on Monday, like all world markets, by fears of a tightening of health restrictions linked to the spread of Omicron and by fears of a failure in the US Congress of a Joe Biden’s investment plan.

Wall Street penalized by Omicron

Wall Street ended lower on Monday, penalized by concerns related to the Omicron variant of the coronavirus and the risk of failure in the United States Senate of Joe Biden’s $ 1.750 billion plan.

The risk that President Joe Biden’s investment plan will be rejected after the decision of U.S. Democratic Senator Joe Manchin on Sunday not to support the project is also weighing on investor morale.

Goldman Sachs has lowered its quarterly forecast for economic growth in the United States for 2022, believing that the social reform project is now in danger.

As a result, the Dow Jones lost 1.48% to 35,365.44 points. The Nasdaq lost 0.07% and the S&P 500 lost 1.03%.

Othersupdates on financial market news

Oil prices rebound on Tuesday although investors remain concerned about Omicron’s rapid spread around the world.

Today’s economic calendar:

Find the entire economic calendar to know all the economic events to comer.

CHART OF THE DAY – ACC 40: consolidation in a triangle

Stock market: rebound after the air gap - CAC 40: the Christmas rally seems unlikely

At the end of 2021, investors often hope a christmas rally to end the year on a high note. This famous rally is above all a bullish inertia at the end of the year, a general bullish movement on stock market indices.

However, this seems unlikely in 2021, the CAC 40 is showing an increase of around 25% this year, so the index should end the year on a good note but without a further rise.

On the contrary, we should see a phase of consolidation inside a symmetrical triangle. Of course, breaking one of the two terminals will trigger the next directional flow. However, in the absence of a catalyst, it is difficult to say that the CAC 40 will prolong its rise. At best, we believe the market may return to test the psychological threshold of 7,000 points.

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