(Bloomberg) — A rebound in stocks and U.S. futures stalled on Wednesday on thin trading volume ahead of the holidays, as investors awaited clarity on the economic impact of the omicron variant and the outlook for U.S. fiscal stimulus.
In Europe, gains in travel shares offset a drop in utilities, while a gauge of Asia-Pacific shares was in the green. Contracts on the S&P 500 were steady, and those on the Nasdaq 100 lower. Tesla Inc. rose in premarket trading after Chief Executive Officer Elon Musk sold more shares and said he has disposed of enough to reach a target of reducing his stake by 10%.
A dollar gauge and Treasury yields were steady, while crude oil prices ticked up.
Markets have been volatile at the end of a year that has seen equities rally amid a recovery from the pandemic, before losing steam on worries about inflation, tighter policy and stricter curbs brought on by the omicron virus variant. Focus also remains on the $2 trillion U.S. economic plan after President Joe Biden said there’s still a chance he can strike a deal to get it through Congress.
Thinner trading volumes heading into the holidays could exacerbate market swings, leaving strategists reluctant to read much into day-to-day gyrations during the period.
“Despite the new restriction measures, many investors believe that omicron would only have a temporary impact on the economic activity and should not be a problem for the overall positive trend in equities,” said Ipek Ozkardeskaya, senior analyst at Swissquote Group. “Investors should remain cautious with big ups and downs into the Xmas break.”
On the virus front, the Biden administration expects to take delivery of 4 million courses of Covid-19 treatments by the end of January, according to officials familiar with the matter. The Food and Drug Administration is poised to authorize a pair of pills from Pfizer Inc. and Merck & Co. as soon as this week.
“While this variant is significant and the impact is powerful, I do still have my rose-colored glasses heading into the New Year because below the surface there is still a lot of opportunity” away from trades that are played out or frothy, Nicole Webb, Wealth Enhancement Group senior vice president, said on Bloomberg Television.
Elsewhere, European power climbed to a fresh record as France faces a winter crunch.
Bitcoin hovered around $49,000.
What to watch this week:
- EIA crude oil inventory report Wednesday
- Bank of Japan Governor Haruhiko Kuroda speaks Thursday
- U.S. consumer income, new home sales, U.S. durable goods, University of Michigan consumer sentiment, initial jobless claims. Thursday
- Friday: U.S. markets are closed. European markets close earlier
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- Futures on the S&P 500 fell 0.1% as of 8:35 a.m. New York time
- Futures on the Nasdaq 100 fell 0.3%
- Futures on the Dow Jones Industrial Average were little changed
- The Stoxx Europe 600 rose 0.1%
- The MSCI World index rose 0.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro rose 0.2% to $1.1305
- The British pound rose 0.4% to $1.3311
- The Japanese yen fell 0.1% to 114.24 per dollar
Bonds
- The yield on 10-year Treasuries was little changed at 1.47%
- Germany’s 10-year yield advanced two basis points to -0.29%
- Britain’s 10-year yield advanced four basis points to 0.91%
Commodities
- West Texas Intermediate crude rose 0.2% to $71.24 a barrel
- Gold futures rose 0.2% to $1,792.70 an ounce
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