Volatility and liquidity remain low ahead of Christmas

Sentiment switched to optimistic this week, helped by a couple of studies suggesting that patients with the Omicron variant face a lower risk of hospitalization and severe disease than the Delta variant, the previously dominant strain.

Later in the day, the usual Thursday's US jobless claims are due, with initial claims expected to stay near last week's 206,000, while continuing claims will likely improve somewhat. 

Additionally, durable goods orders for November will be released, seen improving notably to 1.6%, up from -0.4% scored previously. Personal income and spending data are also on the agenda, followed by the Michigan consumer sentiment index for December and new home sales for November.

Yesterday, the revision of the US Q3 GDP was released, and it printed 2.3%, higher than the previous estimate of 2.1% and the consensus forecast of 2.1%. GDP rose at a 6.7% annualized rate in Q2, so a slowdown but not as bad as previously expected.

The report said the gains were driven by a jump in spending for services, especially international travel and transportation services, as many COVID-19 travel restrictions were lifted.

It looks like the usual Santa Claus rally came this year, too, as US indices returned to near their all-time highs. The momentum stays bullish, despite three rate hikes currently priced in for 2022.