Markets Update Tuesday 21/12/2021 – Christmas Cheer

Frankfurt – 21/12/12021

Christmas Cheer

After the setback at the start of the week, the stock exchanges went up again today. Wall Street made up for yesterday’s losses, and the DAX also closed clearly up. But the mood remains nervous. 

It was mainly bargain hunters who took advantage of the lower prices on the stock markets. They took advantage of the lower prices to get back in. Experts see this as a familiar pattern: “After the crash comes the rebound”.

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Many traders spoke of a technical counter-movement. There could be no talk of a trend reversal or the start of a Christmas rally.

US Markets at a glance

Investors on Wall Street were more optimistic on Tuesday. The Dow Jones extended its gains in trading and went into the evening with a plus of 1.61 per cent at 35,493.13 points. The tech index NASDAQ Composite closed 2.40 per cent higher at 15,341.09 points.

Positive news from Asia and Europe also gave the US stock market a tailwind. 

Strong corporate results from Nike and Micron encouraged investors to return to Wall Street as well. The Dow Jones rose by 1.6 per cent and jumped back above the 35,000 mark. The broad-based S&P 500 rose by 1.8 per cent, while the technology-heavy Nasdaq 100 gained almost 2.3 per cent. The news that US President Joe Biden wants to talk again with Senator Joe Manchin about his trillion-dollar climate and social package also provided relief. So far, the Democratic party colleague has blocked Biden’s plans.

Far East Markets at a glance

Asian markets recovered in Tuesday trading. In Japan, the Nikkei closed with a gain of 2.08 per cent at 28,517.59 points. The Shanghai Composite in mainland China rose 0.88 per cent to 3,625.13 points by the end of trading today, while the Hang Seng was up 1.00 per cent at 22,971.33 units.

After the sharp setback at the start of the week triggered by Omikron concerns, the stock markets in Asia moved up again across the board on Tuesday. The previous day’s losses on Wall Street, which were not as severe, had a supporting effect, as the markets recovered from the day’s lows. In addition, the futures contracts on the US stock indices pointed to a friendly start in the afternoon on Wall Street.

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In addition, market participants spoke of bargain hunters who had used the recent losses as an entry opportunity, according to Dow Jones Newswires. Tokyo was the outlier on the upside. The government’s supplementary budget, which is intended to mitigate the negative economic consequences of the pandemic, provided a tailwind.

European Markets at a glance

The European stock markets were also able to make significant gains today. The EuroSTOXX 50 started with a plus and ultimately closed 1.65 per cent higher at 4,174.99 points.

The DAX already opened higher and left the trading session with an increase of 1.36 per cent at 15,447.44 points. The TecDAX was also friendly after it had already climbed at the start. Its closing level: 3,795.92 points (+0.1 per cent).

Support for the European markets came from Asia. The “range trading” expected for December could be seen, which is why the Asian stock markets rose significantly, some market experts noted. In range trading, stock market participants do not try to trade the big move or the breakout, but the price trend within the market’s range is moving.

Forex, gold, oil and crypto

The euro was little changed in forex trading. In New York trading, the single currency last cost 1.1277 dollars. The gloomy GfK consumer sentiment for Germany had not moved the euro significantly. In the eurozone as a whole, consumer confidence also deteriorated noticeably in December. 

Meanwhile, the Turkish lira benefited from government measures to support the currency. After falling for weeks, the lira appreciated by up to 25 per cent on Monday evening. This was triggered by government measures against further devaluation announced by President Recep Tayyip Erdogan. Among other things, the government wants to hedge deposits in the lira against losses from exchange rate fluctuations. One dollar was recently worth 12.96 liras, and one euro was traded at 14.77 liras.

Bargain hunters also returned to the crude oil market. Brent crude from the North Sea rose by 1.3 per cent to 72.43 dollars a barrel, while WTI oil from the USA increased by 2.13 dollars to 70.75 dollars. Crude oil prices were boosted by the better mood on the financial markets. Traders also spoke of a countermovement after the recent price losses. In addition, trading becomes thinner at the end of the year, which often leads to heavier price fluctuations.

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Overall, gold traded in a narrow range and excited the session almost unchanged at around $1,790 a troy ounce.

The cryptocurrency market further recovered in Tuesday trading. Bitcoin gained 3.9 per cent to $48,650, while Ethereum and Binance Coin rose 1.5 per cent to $4,000 and $527, respectively. XRP accelerated its upward trend, rising 8.8 per cent to $0.94. Cardano further stabilised as well and grew 3.1 per cent to $1.28, while LUNA and AVAX shot up by almost 10 per cent to $89 and $122. 

Corporate and world economic news

Economic data

The effects of the fourth wave of corona have completely ruined the buying mood of the people in Germany before Christmas. High inflation is doing the rest. “Consumer sentiment in Germany cooled noticeably in December,” judges the Nuremberg-based consumer research company GfK based on its monthly forecast. “Both economic and income expectations, as well as the propensity to buy, have fallen significantly,” the consumer researchers summed up on Tuesday.

The deficit in the US current account increased more significantly than expected in the third quarter of 2021. According to preliminary calculations, the deficit was $214.77 billion. Economists surveyed by Dow Jones Newswires had expected a liability balance of only USD 205.50 billion. 

The consumer sentiment in the eurozone deteriorated noticeably in December. The indicator fell by 1.5 points to minus 8.3 points, the EU Commission announced in Brussels on Tuesday. Analysts had expected this development. The indicator is thus only slightly above its long-term average. The development was similar in the European Union (EU).

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