Asian Open: Omicron detected in around one third of US states

Asian Futures:

• Australia’s ASX 200 index closed at 7,241.20 on Friday
• Japan's Nikkei 225 index closed at 28,029.57 on Friday
• Hong Kong's Hang Seng index closed at 23,766.69 on Friday
• China'sA50 Index closed at 15,607.09 on Friday

European Friday close:

• UK's FTSE 100 index fell -6.89 points (-0.1%) to close at 7122.32
• Europe's Euro STOXX 50  index fell -27.87 points (-0.68%) to close at 4080.15
• Germany's DAX index fell -93.13 points (-0.61%) to close at 15169.98
• France's CAC 40 index fell -30.23 points (-0.44%) to close at 6765.52

US Friday close:

• The Dow Jones fell -59.72 points (-0.17%) to close at 34,580.08
• The S&P 500 fell -38.67 points (-0.85%) to close at 4,538.43
• The Nasdaq 100 fell -278.721 points (-1.74%) to close at 15,712.04

Weak payrolls and Omicron weighed on sentiment

Wall Street was lower on Friday after a weaker-than-expected Nonfarm payrolls report, with concerns over the Omicron variant only adding to the selling pressures. Only 210k jobs were added in November, not even half was to the 556k expected, although the unemployment rate did fall to a post-pandemic low of 4.2% from 4.5%. Over the weekend it was reported that the Omicron variant has now been detected in around one third of all states, although the Delta strain remains the dominant strain. The S&) 500 E-mini futures markets is trading around -0.8% lower.

The Russell 2000 has met resistance at its 200-day eMA and fell -2.1%, the S&P 500 is back below its 50-day eMA and fell -0.86%, as is the Nasdaq 100 which fell -1.7%. Last week tech stocks were down around -2% with the FANG+ index off by -5.9% and sits at a 1-month low.

Safe-haven currencies shined last week

Safe-haven currencies such as JPY and CHF prospered last week as the Omicron variant continued to dominate headlines. The Australian dollar was the weakest major currency last week, falling -1.67% to close below 70c and at its lowest level since July 2020. Despite the stronger employment report from Canada, combined with a weak US employment report, USD/CAD closed to its highest level since January. Weak oil prices weighed on the Canadian dollar which also saw it close lower for the week alongside NZD and AUD. A bearish wedge is forming on USD/CHF which is confirmed with a break below 0.9100. The US dollar index remains in a corrective phase, and Friday’s Doji below -6.43 resistance has us on guard for another dip lower.

Gold gets a bid during risk-off trade

The WTI January futures contract remains below the 200-day eMA after twice testing it last week. The Brent futures contract met a similar fate and closed below $70 for the first time since late September as demand concerns rise alongside Omicron concerns. Gold was bid during Friday’s risk-off session and closed the day with a bullish engulfing candle and Doji above support on the weekly chart. Silver printed a bullish outside day / bullish hammer which suggest exhaustion at the lows.

ASX 200 Market Internals:

The ASX 200 continues ricochet between 7200 and 7300 with each day last week printing either a bullish or bearish hammer. Range-trading strategies remain the preferred choice until we see a daily close above 7337 or below 7154.

ASX 200: 7241.2 (0.22%), 05 December 2021

• Utilities (0.07%) was the strongest sector and Information Technology (-0.09%) was the weakest
• 7 out of the 11 sectors closed higher
• 4 out of the 11 sectors outperformed the index
• 118 (59.00%) stocks advanced, 75 (37.50%) stocks declined
• 52.5% of stocks closed above their 200-day average
• 30% of stocks closed above their 50-day average
• 23% of stocks closed above their 20-day average

Outperformers:

• + 3.79% - Pro Medicus Ltd (PME.AX)
• + 3.34%  -Washington H Soul Pattinson and Company Ltd (SOL.AX)
• + 3.09% - Corporate Travel Management Ltd (CTD.AX)

Underperformers:

• -8.61%  -TPG Telecom Ltd (TPG.AX)
• -4.70% - Codan Ltd (CDA.AX)
• -4.22% - Kogan.com Ltd (KGN.AX)

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