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Analytics, 03 January 2022

What will drive the markets this week?

The Santa Claus rally that started just before the Christmas holiday brought equity markets to new heights, before slowing down as 2021 ended.

In 2021, the S&P 500 saw 70 record high closes – the second-highest number in a calendar year for the index since 1995. Meanwhile, all three major U.S. stock indices gained in December, returning double-digit percentages for the year. As the first trading week of 2022 starts, investors could be looking forward to the “January Effect,” a perceived increase in stock prices during January driven by tax-loss harvesting. Since 1928, January has historically been a strong month for stocks.

The trend seems to be already in effect as stocks rose sharply on Monday – the first trading day of 2022 - as investors showed hope about the economy’s ability to overcome the surge in Covid cases which continues to create uncertainty around the world.

This week investors will also assess a host of data, including updates on the U.S. labor market, and Purchasing Managers’ Index (PMI) readings from China, Japan, and India, among others.

Monday, January 3:

Tuesday, January 4:

Wednesday, January 5:

Thursday, January 6:

Friday, January 7:

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