Stocks teeter in tight trade as year draws to a close: markets come to an end

(Bloomberg) – US stocks have hovered between gains and losses, with moves exacerbated by weak trade in the last session of the year. The 10-year Treasury yield held above 1.5% as the dollar declined.

The S&P 500 has been fluctuating, with volume about half of the early trade average over the past 30 days. It was a hectic week for the markets as the benchmark fell a record low on Thursday. Modest declines by megacaps like Microsoft Corp., Apple Inc. and Amazon.com Inc. weighed on the Nasdaq 100. However, the S&P 500 and Nasdaq 100 are up about 27% this year.

Trading was light as investors pulled back on a strong year for global equities as economies recovered from the pandemic. Bond investors are managing losses as many central banks move towards tighter monetary parameters to fight inflation. How the coronavirus and these policy changes are shaping the economic reopening is key to the outlook.

“If there’s one thing we’ve learned this year, it’s that the US economy has proven to be resilient in the face of the challenges of the pandemic,” said Brett Ryan, senior US economist at Deutsche Bank. While the omicron and fiscal uncertainty present risks, “the economy would still grow at a rate well above trend even if those risks materialize,” he said.

Elsewhere, the dollar was down against most of its Group of 10 peers. Oil fell, crushing the biggest annual gain since 2009. Bitcoin rallied for a second session, crushing its biggest monthly decline since May to trade around $ 48,000.

Traders continue to monitor struggling Chinese real estate developers. A Chinese state-owned company will take a 29% stake in China South City Holdings Ltd., in the latest sign from authorities stepping up support for struggling real estate firms.

Emphasis was also placed on telephone talks between US President Joe Biden and Russian President Vladimir Putin. The Kremlin said Putin was happy with the outcome of the talks. The United States and its allies have sounded the alarm about a possible Russian invasion of Ukraine.

For more market analysis, read our MLIV blog.

Some of the main movements in the markets:

Actions

• The S&P 500 was little changed at 10:16 a.m. New York time
• The Nasdaq 100 fell 0.1%
• The Dow Jones Industrial Average has changed little
• The Stoxx Europe 600 is down 0.2%
• The MSCI World Index has changed little

Currencies

• Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.2% to $ 1.1351
• The British pound was little changed at $ 1.3511
• The Japanese yen was little changed at 115.10 per dollar

Obligations

• The yield on 10-year treasury bills was little changed at 1.51%
• The German 10-year yield was little changed at -0.18%
• The UK 10-year yield was little changed at 0.97%

Merchandise

• West Texas Intermediate crude fell 1.1% to $ 76.17 a barrel
• Gold futures rose 0.5% to $ 1,822.50 an ounce

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