FirstFT: US stocks close at record high

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US stocks closed at record highs on the final day of trading before the Christmas break as the release of encouraging economic and health data eased anxiety about the impact of the Omicron coronavirus variant.

The S&P 500 stock index added 0.6 per cent, taking its gains for the week to more than 2 per cent. The benchmark index closed at 4,725.79. The tech-heavy Nasdaq Composite closed 0.8 per cent higher, leaving the index up more than 3 per cent this week at 15,653.37.

The record close follows a volatile month of trading. Stocks have swung dramatically since the discovery of the Omicron strain in late November, and a recent shift from global central banks towards tightening monetary policy.

In recent days, however, there have been encouraging results from a series of academic studies showing that the Omicron variant is less severe than the earlier Delta variant. The latest study was released yesterday by the UK Health Security Agency, a government body, and based on 132 people infected with the variant who sought hospital treatment in England up to December 20.

The study found that people with Omicron were between 50 and 70 per cent less likely to require an overnight stay in hospital and were 31 to 45 per cent less likely to need hospital treatment compared with those with Delta.

UK government officials said the reduction in Omicron’s severity stemmed from a combination of breakthrough infections in vaccinated people and reinfections caused by the variant being milder, and a potential change in the biology of the virus.

Line chart of Year-to-date performance (%) showing US stocks set new record close on Thursday

The findings were consistent with separate research released this week by Imperial College London and the University of Edinburgh, alongside healthcare data from South Africa and Denmark.

The UKHSA study found, however, that people who received coronavirus vaccine booster shots more than 10 weeks ago were facing the first signs of waning immunity against symptomatic infection from Omicron.

Alongside the latest medical data investors also digested encouraging economic data highlighting the resilience of the world’s largest economy.

US first-time jobless claims were unchanged from the previous week, while new orders of US durable goods last month were higher than analysts expected.

The US core personal consumption expenditure index, which strips out volatile items such as food and energy costs, leapt 4.7 per cent year on year in November, suggesting American households were spending at a rapid rate.

2022 stock market outlook Words like “nimble” and “volatility” pepper predictions, writes Markets Editor Katie Martin.

Thanks for reading FirstFT Americas. We wish all our readers a happy holiday and will be back in your inboxes on Tuesday, December 28. Here’s the rest of today’s news — Gordon

1. US and Russia to hold Ukraine talks Vladimir Putin said the two sides would meet in Geneva in January for talks, which he maintained at his annual press conference were essential to protect Moscow from what he claimed were existential threats from Nato.

Go deeper By amassing tens of thousands of troops on the Ukrainian border, Putin has forced the White House into what experts in the region believe is a scramble to formulate policy on the fly.

2. UK department store Selfridges sold for $5.4bn The retailer, established in 1908 by Harry Gordon Selfridge, has been sold by Canada’s billionaire Weston family to a Thai conglomerate and an Austrian real estate group.

3. Facebook befriends start-up to build the metaverse AI Reverie, an artificial intelligence company with links to the US military, will be used by Facebook to build the metaverse after being acquired by the company now known as Meta in August.

4. Buyout groups spend $42bn buying companies from themselves Private equity groups this year struck $42bn worth of deals in which they sold portfolio companies to their own funds, a sharp increase over 2020 in a once-niche type of transaction that can generate handsome payouts to executives.

5. Low supply and high demand boosts champagne prices Vintage champagnes such as Dom Pérignon 2008 and Krug 2000 have popped in price this year, outperforming global stocks, as wealthy investors hunt for returns in previously overlooked asset classes.

Coronavirus digest

Priestley/gantt timeline chart showing each Broadway show that opened/reopened during the 2021 season and their Covid- and non-Covid-related performance cancellations over the course of the year. Many cancellations have happened close to the holidays, normally the most lucrative time for Broadway shows

The day ahead

Libya election postponed Libyans were meant to go to the polls but after the High National Electoral Commission ordered a dissolution of the electoral committees nationwide without naming a final list of candidates, the commission said it was “impossible” to hold the vote. The election board has proposed January 24 as the new date for the poll. (Al Jazeera)

Christmas Eve Pope Francis will celebrate midnight mass at St Peter’s Basilica. Midnight mass will also be celebrated at the site of Jesus’s birth, at the Church of the Nativity on Manger Square in the West Bank town of Bethlehem.

What else we’re reading

Year in a word: Transitory As inflation kept accelerating the word “transitory”, used by Federal Reserve chair Jay Powell to describe temporary price rises, started to become an embarrassment. Other FT words of the year include metaverse and meme stock.

Web3’s messy vision of a tech future As 2022 looms, a new movement, under the banner of Web3, has become one of the most discussed — and least understood — forces in tech. West Coast Editor Richard Waters does his best to explain.

The Art of Conversation An FT illustrated story by Kristen Radtke, the author of two books of graphic non-fiction, looking back at how humans learnt to communicate — and how we might do it better in the pandemic age.

Where have weather records been broken this year? This year has been progressively warmer than normal, with global temperatures inching higher than the average with each passing month. The FT is tracking extreme climate events from around the world. Explore our interactive tracker.

Afghan female footballers enjoy new lease of life in England After facing rocket blasts and firefights, some of the most talented female players escaped the Taliban and are finding new beginnings in England’s north, thanks to supporters including Leeds United Football Club.

Television

The exertion of Christmas lunch usually gives way to the quiet hubbub of primetime comedy. But the television landscape has changed since the 1970s. Henry Mance looks back at the golden age of Christmas TV and considers what might take its place.

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