Tuesday December 27th

U.S. stock market index futures rose on Tuesday as the final trading days of 2022 kicked off and investors hoped a Santa Claus rally will appear and lift a market that has been weighed down by recession fears. Dow Jones Industrial Average futures rose by 200 points, or 0.6%. S&P 500 and Nasdaq 100 futures advanced 0.56% and 0.37%, respectively. During the regular session Friday, the Dow Jones Industrial Average closed 176 points higher, or 0.5%. The S&P 500 rose 0.6%, and the Nasdaq Composite added 0.2%. Friday marked the start of the time period for a Santa Claus rally, which is typically considered the final five-day trading stretch in the current year, as well as the first two trading days in the new year. Markets were closed Monday for the Christmas holiday. Due to low trading volumes, investors are expecting either relative quiet or further volatility during the holiday-shortened week. Markets are closing out a month and year defined by a surge in recession fears. In December, the S&P 500 dropped roughly 5.8%, while the Dow and Nasdaq dropped about 4% and 8.5%, respectively. These are the biggest monthly declines since September. The major averages are headed for their worst annual performance since 2008. ″[The] question of what kind of recession remains unanswered,” Quincy Krosby, chief global strategist at LPL Financial, wrote Friday. “And for this, the answer is dictated primarily from how much more the Fed needs to raise rates to finally tackle sticky inflation.” On the economic front, traders are expecting the latest data on November wholesale inventories and the October S&P/Case-Shiller home prices Tuesday before the bell. Stocks in Asia rose as China officially announced overnight it will end quarantine for inbound travelers on Jan. 8 — symbolizing an end to its zero-Covid policy that it’s held for nearly three years. The Shanghai Composite rose 0.98% to close at 3,095.57 and the Shenzhen Component gained 1.16% to 11,106.50 while markets in Hong Kong, Australia and New Zealand were closed for Christmas holiday. In Japan, the Nikkei 225 rose 0.16% to 26,447.87 and the Topix gained 0.4% to 1,910.15 as the nation saw retail sales up for the 9th consecutive month led by tourism. The Kospi in South Korea gained 0.68% to 2,332.79 and the Kosdaq climbed 1.37% 704.19. Oil hit a three-week high on Tuesday as China’s latest easing of COVID-19 restrictions spurred hopes of a fuel demand recovery, with further support coming from cuts to U.S. energy production caused by winter storms. China will stop requiring inbound travellers to go into quarantine, starting from Jan. 8, the National Health Commission said on Monday in a major step towards easing curbs on borders that have been largely shut since 2020. Brent crude was up 47 cents, or 0.6%, at $84.39 a barrel and U.S. West Texas Intermediate crude gained 41 cents, or 0.5%, to $79.97. Both benchmarks hit their highest since Dec. 5 earlier in the session. Gold prices firmed above the key psychological threshold of $1,800 on Tuesday, as the U.S. dollar weakened following China’s decision to further ease COVID-19 restrictions. Spot gold rose 0.7% to $1,809.55 per ounce. Gold futures were up 0.8% to $1,818.30.