In This Article:
The Majors
It was a bullish final week of the year for the European majors in the week ending 31st December.
The EuroStoxx600 rose by 1.10%, with the CAC40 and the DAX30 ending the week up by 0.94% and by 0.82% respectively.
Following another bullish week, the majors also had a bullish final month of the year. The CAC40 led the way, rising by 6.43%, with the DAX30 and the EuroStoxx600 gaining 5.20% and 5.37% respectively. In spite of COVID-19 and the new Omicron strain, it was a particularly bullish year for the CAC40, which rallied by 28.9% in 2021. The EuroStoxx600 and DAX30 trailed, however, with gains of 22.3% and 15.8% respectively.
Economic data was on the lighter side in the week, with key stats from the U.S providing some support in thin trading.
In a shortened week for a number of key markets, news updates on the Omicron strain delivered support. Reports of fewer hospitalizations and milder cases, in spite of the surge in new cases, were key. Positive reports from vaccine manufacturers over the effectiveness of boosters were also a market positive. In the week, Johnson & Johnson had reported that a booster shot would be 85% effective at preventing hospitalization.
The Stats
Unemployment figures from France and inflation figures from Spain were the key stats in the week.
In November, jobseeker totals declined from 3,142.5k to 3,087.8k.
More significantly, however, was a marked pickup in inflationary pressure in Spain.
According to prelim figures, Spain’s annual rate of inflation accelerated from 5.5% to 6.7%. Economists had forecast a more modest pickup to 5.7%.
From the U.S
Jobless claims and Chicago’s PMI figures were the key stats in the week, with the markets looking to assess the impact of the Omicron strain on labor market conditions.
In the week ending 24th December, initial jobless claims fell from 206k to 198k. Economists had forecast an increase to 208k.
In December, Chicago’s PMI rose from 61.8 to 63.1, which was also market positive.
Other stats in the week included goods trade data, inventory, and housing sector figures. The stats had a muted impact on the majors, however.
The Market Movers
From the DAX, it was a mixed week for the auto sector. Continental and BMW fell by 0.76% and by 0.78% respectively, with Daimler sliding by 3.57%. Volkswagen bucked the trend, ending the week up by 0.33%.
It was a bearish week for the banking sector, however. Deutsche Bank and Commerzbank fell by 1.55% and by 0.30% respectively.
From the CAC, it was a bullish week for the banks. BNP Paribas rallied by 1.71%, with Soc Gen and Credit Agricole ending the week with gains of 0.90% and 0.48% respectively.