05.01.202212:05 Forex-elemzések és áttekintések: US stock market on January 5, 2022

S&P500

The US market is at highs despite a huge outbreak of Omicron in the US.

On Tuesday, the main US indices closed mixed. The Dow added 0.6%, the NASDAQ dropped by 1.3%, the S&P500 lost 0.1%.

At the same time, Japan's stock indices gained 1% this morning. Meanwhile, China's stock indices plunged by 1%.

Oil rose by $1 yesterday after the OPEC meeting, as the market considers OPEC's total quota increase of 0.4 mln bpd to be clearly insufficient. Brent is trading around $80/bbl.

The number of Omicron cases worldwide keeps rising. On Wednesday, there were 2,150,000 new cases around the world. In the US, there were 567,000 cases. The UK saw an increase of 218,000. France and Italy reported 271,000 and 170,000 new infections respectively. However, mortality has so far remained at relatively low levels. In the US, approximately 40% of cases are caused by Omicron and 60% by the Delta strain. UK Prime Minister Johnson said he hoped Britain would pass the Omicron outbreak without a lockdown.

The S&P500 is at 4,793, staying in the 4,760–4,820 range.

Tuesday saw the release of the ISM Industrial Average for December. It fell to 58.7% from 61.1% in November, below market forecasts of 60%.

Today the market's attention is focused on the minutes from the Fed meeting. There will also be a jobs report from the ADP. New jobs are forecast to rise by 450K in November.

Toyot has for the first time overtaken General Motors. This has also been helped by Tesla, which has significantly increased sales. Hyundai's share has grown.

The US labour market remains strong according to experts' estimates. At the end of the year, the number of Americans changing jobs was at its highest. People are using the strong demand for labour to boost their wages.

A huge outbreak of Omicron in the US and western Europe remains the main risk to markets. A new high was set yesterday.

USDX is at 96.20, trading in the 95.90–96.50 range. The dollar index rose considerably at the beginning of the year. However, yesterday it stopped in the middle of the medium-term range. The dollar is waiting for the Fed minutes.

USDCAD is trading at 1.2715 in the 1.2660–1.2800 range. The pair is barely reacting to oil's attempts to rise. Obviously, the trend in the US dollar is more important for the pair right now. Traders wait for a signal from the US dollar.

The US market is still at the highs. However, the risk of a big drop is very high. Both fundamentals factors and the technical need for a strong pullback are pushing the market lower.