Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Wall Street downplays worries in wishful start to 2022

Published 01/03/2022, 05:18 AM
Updated 01/04/2022, 01:10 AM
© Reuters. FILE PHOTO: A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic

© Reuters. FILE PHOTO: A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic

By Lawrence Delevingne

BOSTON (Reuters) - Wall Street's New Year optimism overpowered concerns about the coronavirus and inflation on Monday, with U.S. and European equity markets advancing in parallel with rising oil prices and U.S. Treasury yields.

The Dow Jones Industrial Average rose 246.76 points, or 0.68%, to 36,585.06; the S&P 500 gained 30.38 points, or 0.64%, to 4,796.56; and the Nasdaq Composite added 187.83 points, or 1.2%, to 15,832.80.

Leading the way were Apple Inc (NASDAQ:AAPL), which on Monday became the first company with a $3 trillion stock market value, and Tesla (NASDAQ:TSLA) Inc, whose shares were up more than 13.5% after reporting stronger-than-expected quarterly deliveries of its electric cars.

The S&P index surged nearly 28% last year, driving MSCI's 50-country index of world stocks to its third consecutive year of double-digit gains.

European shares ended at all-time highs on Monday on hopes of steady economic recovery despite a surge in COVID-19 cases. The pan-European STOXX 600 index ended 0.5% higher at a record close of 489.99 points.

The benchmark U.S. 10-year yields hit a six-week high to yield 1.6384%, with investors expecting a series of interest rate raises this year to combat rising inflation.

"How central banks - particularly the Fed - respond to inflation will be the key story for 2022," BlackRock (NYSE:BLK) Investment Institute strategists wrote in a note Monday.

"We see the higher inflation regime and solid growth as positive for risk assets but bad for bonds for a second consecutive year," they added.

The commodity markets were also quickly back in the swing of things after their nearly two-year resurgence to close out 2021.

Oil rose to nearly $79 a barrel on Monday, supported by tight supply and hopes of a further demand recovery in 2022, despite OPEC+ looking set to agree to a further increase in output.

"Oil markets start the new year on firmer footing than they did in 2021," Peter McNally, global sector lead at investment research firm Third Bridge, wrote in an email. "Inventory levels have fallen dramatically over the past 12 months as demand recovered, OPEC+ constrained output, and US oil supply was slow to respond."

© Reuters. FILE PHOTO: A U.S. one dollar banknote is seen in front of displayed stock graph in this illustration taken May 7, 2021. REUTERS/Dado Ruvic

The U.S. dollar rose against a basket of major currencies on Monday, the first trading day of the new year, in sync with government bond yields as investors expect the Federal Reserve will stay on its path of interest rate hikes in 2022.

Gold prices fell more than 1% on Monday as a risk-on rally in equities pressured bullion. Spot gold dipped 1.5% to around $1,801 an ounce, set for its biggest one-day percentage decline in more than a month. U.S. gold futures fell 1.57% to $1,799.40 an ounce.

Latest comments

why is there no cap on margin use?? we are at almost a Trillion margin debt. that means collectively, 500bn needed to borrow 1 TRILLION. brokers are getting rich borrowing $$$ at rock bottom interest. then loan margin for high interest...hmmm somethings not right here. thanks to the FED for creating the biggest wealth gap we've seen in a long time. QE killed the free market thanks to Bernake '08.
Porimol Minzi
Nssdaq will take a 5% clip over next two weeks. Seems strange right? :)
Tomorrow's Reuters headline: "Fear rattles Wall Street, bears bite as reality sinks in". Following day: Wall Street recovers from sell off, surges to new highs as bulls shake off worry". Rinse and repeat...
this is scary
Even Elon Musk and Ray Dalio, and many Economists said US stock market will collapse soon
Schiller PE of SP500 = 40 USD share price for 1 USD earnings. Dotcom bubble burst at Schiller PE of SP500 = 44. Let that sink in...
good job sir
spot on...not to mention almost a Trillion in margin debt. risky
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.