03.01.202210:31 Forex Analysis & Reviews: Daily stock market update: Omicron cases went down. Correction in the market is overdue

S&P 500

US indices will most likely open with a decline this week.

They already went down on the last trading day of 2021, just below the yearly highs.

And this morning, the S&P 500 showed a drop of roughly 0.25%.

Asian markets also fell, with Japan indices dipping by 0.4%.

Meanwhile, oil remained around December highs, with Brent trading at $ 78.40. This morning, it rose about 1%.

But in Europe, the gas crisis continues, so prices on the ICE exchange fell noticeably before January 1. It dropped after reports revealed that LNG tankers from the United States were sent to Europe.

On the bright side, the Nord Stream 2 gas pipeline is now fully operational. Sadly, the certification is being delayed by Germany.

With regards to the coronavirus, the total number of new cases all over the world jumped to a record 1,900,000 on December 30. A huge part of it, more than 500,000 cases, came from the United States. But yesterday, the figure dipped to 830,000. There was a significant declines in the UK (to 137,000), France and Italy (to less than 60,000 each).

Going back to the US market, the S&P 500 closed at 4.766 points, with a range of 4.730 - 4.800 points. Large investors wanted to get a good result at the end of the year, so growth occurred in the index. But a correction this January is very likely, probably after a roll back to the 50-day average.

Important reports will be seen this week, starting with the December ISM industrial index report on Wednesday. It will be followed by the December employment report on Friday. Data may come out weak because of the omicron outbreak at the end of December. Fed minutes will also be released on Wednesday, and this can trigger a large correction in the US market.

The US market grew by 20-25% in 2021, but experts warned that the result for 2022 will most probably be more modest. Growth would be less than 10% because the Fed will tighten policy and hike rates at least 3 times by the end of the year.

Talking about dollar, there was a recovery at the opening of the year, so USDX hit 95.80 points, with a range of 95.50 - 96.10. Investors are preparing for the release of Fed minutes this week.

Accordingly, USD/CAD traded at 1.2680, with a range of 1.2600 - 1.2760. Although the pair is growing along with the US dollar, the pressure from high oil prices remains.

Conclusion: The market will carefully study the first economic data this year. A strong corrective decline is very likely.