S&P Futures Near Record High in Bright Start to Year

S&P Futures Near Record High in Bright Start to Year
The Wall Street sign is seen outside the New York Stock Exchange (NYSE) in New York, on Dec. 17, 2019. (Brendan McDermid/Reuters)

S&P 500 futures neared record levels on Monday as equity markets looked to extend a recovery from the pandemic shock into the new year, while shares in heavyweight Tesla jumped after the electric carmaker posted bumper delivery numbers.

Tesla’s shares rose 6.7 percent in premarket trading after the company’s quarterly deliveries exceeded Wall Street estimates, riding out global chip shortages as it ramped up production in China.

The company’s record deliveries also boosted other companies in the electric vehicle sector including Lucid Group and Rivian Automotive, which added nearly 2 percent each.

Shares of oil majors Chevron Corp. and Exxon Mobil Corp. gained more than 1 percent each as crude prices rose on tight supply and hopes of a further demand recovery in 2022.

The S&P 500 energy index was the top sectoral performer in 2021 with a 47.7 percent rise—its biggest yearly gain ever—as surging oil prices turbo-charged corporate profits.

“There is certain optimism that we are seeing at the start of the year with a general sense that the Omicron variant won’t do quite the damage to the economy as the market initially thought it would,” said Rick Meckler, partner at Cherry Lane Investments.

“But, we cannot replicate 2021 gains as we expect some curbs in corporate earnings growth.”

All of Wall Street’s main indexes ended 2021 with monthly, quarterly, and annual gains, recording their biggest three-year advance since 1999.

The benchmark S&P 500 added 27 percent in 2021 and reported 70 record-high closes, its the second-most ever, in a tumultuous year hit by new COVID-19 variants and supply chain shortages.

The Dow added 18.7 percent for the year and the tech-heavy Nasdaq gained 21.4 percent.

At 08:37 a.m. ET, Dow e-minis were up 154 points, or 0.43 percent, S&P 500 e-minis were up 24.75 points, or 0.52 percent, and Nasdaq 100 e-minis were up 100 points, or 0.61 percent.

Concerns around the new Omicron coronavirus variant lingered in the new year after top U.S. infectious disease expert Anthony Fauci warned that there was still a danger of a surge in hospitalization due to coronavirus cases even as early data suggested that Omicron is less severe.

McDonald’s gained 1 percent after Piper Sandler upgraded the U.S. fast-food chain to “overweight” from “neutral,” saying it is positioned for continued top-line outperformance compared to its peers.

By Bansari Mayur Kamdar