Key Events This Week: Omicron Fears to Dent S&P 500’s Hopes for New Record High?

Can this benchmark index for US stocks climb to a fresh peak before the year is over, taking advantage of the lack of major economic data and events?

Monday, December 27

• Australian, UK markets closed
• CNH: China November industrial profits
• USD: US December manufacturing activity

Tuesday, December 28

• Crude: weekly API report on US crude oil inventories, supply and demand
• JPY: Japan November unemployment, industrial production

Wednesday, December 29

• USD: US November wholesale inventories
• US crude: EIA weekly US crude oil inventory report

Thursday, December 30

• EUR: ECB economic bulletin
• USD: US initial weekly jobless claims

Friday, December 31

• CNH: China December manufacturing and non-manufacturing PMIs

Considering the light economic calendar in this final week of 2021, Omicron-related headlines are set to hold sway over market sentiment before we bring the curtains down on the year.

Even so, S&P 500 futures are edging higher at the time of writing.

Although the number of Covid cases have recently spiked in major economies, from the United States to China, the market’s risk appetite has so far appeared willing to look past such concerns. After all, this isn’t the world’s first rodeo against a new variant, and are hoping that the global economy has enough resilience and know-how to overcome it. Such a notion is buffered by the higher vaccination rates globally, which suggest that Omiron’s impact might not be as severe as in the past.

Still, an unexpected turn for the worse in this ongoing battle against Covid-19, which is entering its third year, could see a sharp decline in risk assets. If so, market jitters could be amplified by the thinner liquidity and lower volumes that typically accompany the year-end period.

By Han Tan Chief Market Analyst at Exinity Group

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