Global stocks rose, while U.S. markets paused for holiday

Global stocks moved higher in a quiet trading session, with U.S. markets closing due to the Martin Luther King Jr. Day holiday.

In a quiet trading session on Monday, global stocks moved higher while the U.S. markets closed for the holiday.

Indexes in Europe and Asia stood mainly in the green. The pan-European Stoxx 600 climbed 0.9%, while Tokyo’s Nikkei 225 finished the day up 0.8%.

Nasdaq and the New York Stock Exchange closed Monday for a holiday. CME Group, which overseas commodities, said there would be no regular trading or settlements for this week.

Worldwide, investors continue to worry over inflation and tighter monetary policy.

Signals from the Fed show its monetary policy group FOMC on track for faster rate increases.

Overview of the global stocks

In the meantime, markets are pricing in three interest rate gains from the central bank in 2022, first in March.

At the same time, inflation blurs the picture. Recent readings of historical inflation support the idea that the Fed will tighten policy. However, the data also shows inflation approaching its peak. Slowing inflation would be a moderating force on support from the Fed.

A strategist at Deutsche Bank, Jim Reid, said that it’s becoming clear that 2022 will be a year of a battle between the Fed and financial conditions.

With the Fed keeping calm, corporate earnings might be a significant definer of investor sentiment this week.

A disappointing earnings season might turn out to be a more significant issue for the global stock market than a tighter Fed policy. An analyst at broker CMC Markets, Michael Hewson, said that the only drivers for markets would be the continuation of the Q4 earnings season. Credit Suisse‘s Zurich-listed stock dropped 3% after the bank’s chair resigned. GSK was up 5%, while Unilever fell by 7%.