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Investors are braced for higher volatility over the holiday season due to uncertainty of the economic impact of the Omicron variant of Covid-19.
U.S. stock futures grinded higher, with little news driving markets after the Christmas holiday.
Futures for the S&P 500 were up 0.2% Monday. The index hit its 68th record close of 2021 Thursday. U.S. markets were closed Friday for the holiday. Contracts for the tech-focused Nasdaq-100 edged up, and futures for the Dow Jones Industrial Average were flat.
Investors are braced for higher volatility over the holiday season. Concerns over the rapid spread of the Omicron variant of Covid-19 and the economic impact of measures countries may take to stem its spread have weighed on markets in recent weeks.
Some investors expect that will be mitigated by vaccines and the rollout of booster shots in some nations.
“Everything seems to be serious but manageable. Anything that changes that, this could probably make a big impact,” said Luca Paolini, chief strategist at Pictet Asset Management.
Market moves can be amplified during the holiday season due to a lack of liquidity, or how readily buyers and sellers can find each other. With many traders off, prices people are willing to buy and sell at may be higher or lower because there are fewer counterparties.
“We are in kind of this Christmas trading range, but low liquidity makes any potential shock bigger,” Mr. Paolini added.
Shares of airline companies drifted lower in premarket trading. United Airlines Holdings declined 2.8% and American Airlines Group shed 2.3%. Flight cancellations marred Christmas weekend for many travelers, as Covid-19 left carriers short-staffed to operate busy schedules over the holiday.
In bond markets, the yield on the benchmark 10-year Treasury note ticked down to 1.481% from 1.492% Thursday. Yields and prices move inversely.
Overseas, the pan-continental Stoxx Europe 600 edged up 0.3%. Markets in the U.K. were closed.
In Asia, China’s Shanghai Composite closed almost 0.1% lower. South Korea’s Kospi and Japan’s Nikkei 225 each declined 0.4%. Markets in Hong Kong and Australia were closed.
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