European stocks ended higher on Monday as US stocks rose for a fourth day amid weak trading with the Irish and UK markets closed for a holiday.
The Stoxx Europe 600 index gained 0.6%, extending last week’s rally and hitting its highest level in five weeks. Tech stocks led the gains, following a rise in the Nasdaq 100 Index.
Coronavirus infections increased globally over the weekend, with France reporting a daily record of more than 100,000 new cases. Stocks in the region have a rocky end to the year as market participants assess the economic outlook amid the spread of the new omicron variant and central banks have become more hawkish in response to soaring inflation . With only a few sessions remaining in the year, Europe’s main index is up 22% in 2021, and less than 1% of its record.
“This week should be a week of transition, with few sessions, low volumes and little news expected,” said Jaime Espejo, equity fund manager at Imantia Capital in Madrid. “The threat of the coronavirus is still very high because the infection rate is higher than expected. ”
In the US, the SandP 500 headed for another record close, with all major industry groups advancing. The technology-rich Nasdaq 100 jumped more than 1%, outperforming other benchmarks. The dollar weakened and the yen lagged against its peers. The two-year yield rose ahead of an auction while long-term rates fell slightly.
“Gathering of Santa Claus”
“We love it, we love to see the Santa Reunion continue,” Victoria Greene, founding partner and chief investment officer at G Squared Private Wealth, told Bloomberg TV. “And I think the ability of the stock markets to climb the wall of worry should not be underestimated.”
An annual event known as the “Santa Claus Gathering” kicked off on Monday. Since 1969, the SandP 500 Index has recorded an average gain of 1.3% over the seven-day period, which includes the last five trading days of the year and the first two trading days of the new year, according to The Stock Trader’s Almanac.
Megacap stocks were the biggest contributor to the SandP 500’s gains, with Microsoft and Meta Platforms, Facebook’s parent company, among the top performers. Tesla, was heading for its biggest four-day win since March.
Travel stocks underperformed, despite reducing earlier losses, after hundreds of flights were canceled over Christmas due to a spike in Covid-19 cases. Anthony Fauci, senior medical adviser to President Joe Biden, has indicated his support for making vaccinations a requirement for domestic fights.
JPMorgan Chase and Co strategists said there was little reason to fear the rally that has catapulted US stocks to successive record highs this year will end any time soon. In fact, it can get wider.
Chinese authorities have started widespread disinfection measures in the western city of Xi’an, where an epidemic presents one of the country’s biggest challenges. China’s central bank pledged increased economic support over the weekend, in contrast to measures taken by the Federal Reserve and other central banks to fight inflation by cutting stimulus measures. -Bloomberg