(Bloomberg) — U.S. equity futures gained, while Asian stocks were mixed in thin trading as investors mulled the impact of the omicron variant on the global recovery. Shares of troubled China Evergrande Group were suspended in Hong Kong.
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S&P 500 and Nasdaq 100 contracts advanced at the start of the new year, with major markets including Australia, Japan and China all shut for holidays in Asia. Hong Kong’s benchmark gauge fell, dragged down by developers and tech companies, while equities pared gains in South Korea and Taiwan.
Last year “was simply a period of ‘risk on,’” Jefferies strategists led by Sean Darby wrote in a note. “Peering into 2022, we expect volatility to rise, meaning that the return per unit of risk comes to the forefront.”
All eyes are on the omicron variant of Covid-19, which is spreading rapidly but also appears to be less severe than some earlier variants based on the rate of hospitalizations. The policy trajectory of the Federal Reserve and other central banks is also in focus for 2022, particularly as inflation continues to present a challenge.
There’s “a positive setup into 2022 with Fed and Covid headwinds to ease, and China policy tailwinds,” JPMorgan Chase & Co. strategists led by Mixo Das in Hong Kong, wrote in a report Sunday. “Overall, our economists see less disruption to economic activity and above trend global growth this quarter, particularly in Asia. In terms of Fed tightening, the moment of peak disruption for markets may also be passing.”
Asia’s factory activity continued its expansion in December, according to a slew of data released Monday, lifted by resilient demand and easing supply-chain bottlenecks.
While no specific reason was given for the halt in Evergrande trading, developer shares sank amid local-media reports that the company had been ordered to tear down apartment blocks in a development in Hainan province.
Oil edged higher as Libyan output fell before an OPEC+ meeting on Tuesday to discuss production policy.
What to watch this week:
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FOMC meeting minutes scheduled for release on Wednesday
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Fed’s Bullard discusses the U.S. economy and monetary policy in an event on Thursday
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Fed’s Daly discusses monetary policy on a panel Friday
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ECB’s Schnabel speaks on a panel Saturday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
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S&P 500 futures rose 0.4% as of 1:38 p.m. in Hong Kong
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Nasdaq 100 futures gained 0.5%
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South Korea’s Kospi index advanced 0.3%
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Taiwan’s Taiex rose 0.3%
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Hang Seng Index declined 0.5%
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Euro Stoxx 50 futures fell 0.1%
Currencies
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The yen weakened 0.2% to 115.30
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The Bloomberg Dollar Spot Index gained 0.3%
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The euro fell 0.3% to 1.1338
Bonds
Commodities
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West Texas Intermediate crude gained 0.9% to $75.85 a barrel
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Gold fell 0.2% to $1,825.07 an ounce
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