Stocks Dip, Treasuries Edge Up in Cautious Trading

29/12/2021 Stocks are lower this morning and Treasuries edged up as investors assessed the economic implications of the omicron coronavirus outbreak. Shares slipped in Japan, technology stocks drove a retreat in Hong Kong and China slid. U.S. futures fluctuated after the S&P 500 and the Nasdaq 100 weakened Tuesday, snapping four sessions of gains. Volumes remained thin into the end of the year in some markets.
Sentiment in China is being sapped by Beijing’s tightening oversight of overseas share sales and economic risks from a property slowdown. Authorities are expected to add stimulus next year to steady expansion.
A key gauge of interbank funding costs in China fell to the lowest level since January after the nation’s central bank added more cash to the financial system to ease a seasonal surge in liquidity demand.

Locally the JSE Allshare gained 1.22 % with SOL leading the gainers up 5.23%, NPN and PRX were the laggards on the back of Tencent weakness, NPN and PRX were down 0.79 and 0.88 percent respectively. The Rand gave up the previous few days gains losing 1.9% to the dollar. We should be in for a lower start as Tencent trades down 1.73%, US Futures are mixed and IG Top 40 is 115 points lower.
European stocks rose yesterday as holiday-thinned trade continues in the region. The pan-European Stoxx 600 index gained 0.6%. In Germany, the Dax climbed 0.9%, and France’s CAC 40 gained 0.6%. Markets in the U.K. and Ireland remained closed due to Christmas festivities.
Overnight in the US the Dow notched its fifth straight day of gains, rising more than 90 points. The S&P 500 eked out an intraday record before closing lower on the day. The Nasdaq Composite lagged, falling 0.6%. Tuesday’s moves are taking place during the “Santa Claus rally” period, which encompass the last five trading days of December and the first five of January. This is a historically strong period for the market, with the S&P 500 averaging a return of 1.7% since 1928.
Asian markets are mixed with Japan, Mainland China and Hong Kong lower and the ASX 200 1.21% higher after a two day holiday. Tencent down 1.73%
Gold and OIL are both flat.