The price boards across Asia and Europe are awash in green on Tuesday morning, and U.S. futures and oil prices are on the rise as investors go full risk-on to start off 2022. Alas, the budding rally isn’t extending into the crypto markets. Bitcoin, Ethereum, and Dogecoin are all in the red this morning.

Tech and travel

In Europe, the travel and leisure sector on Tuesday jumped more than 3% at the open, a sign investors are seeing past the worst of the Omicron-fueled outbreak and are pinning their hopes on a bounce-back from lockdowns and rising infections.

Tech bulls, too, are out in force once again after investors on Monday pushed Apple over the $3 trillion valuation—that’s trillion with a T—mark, and sent Tesla shares zooming more than 13% higher on record car-sales figures. Overall, tech shares led the markets higher on Monday, the first trading day of the year.

Clearly, festive spirits are still dominating global markets.

As Ryan Detrick of LPL Financial points out, today is the last day of the so-called Santa Claus rally. In the past, a strong Santa Claus rally—defined as the first seven trading days after Christmas—performance has tended to coincide with larger Q1 gains in the equities markets.

The week ahead

Investors are due for a reality check later this week. Eurozone inflation data and Friday’s U.S. jobs report will provide key data points about the health of these major economies so early into the new year.

Meanwhile, investors are anxiously watching the latest on Omicron. The data there is indeed mixed. Deutsche Bank points out in a research note this morning that, in the past week ending Sunday, there have been more than 10 million confirmed cases of COVID-19 around the world, the highest number of the entire pandemic so far. On the plus side: Hospitalizations in London, which was hit particularly hard by the virus over the holiday season, appear to have peaked.

In general, lagging indicators such as hospitalization numbers and deaths will likely tell the full tale of what to expect from Omicron.

“On the one hand, the evidence is getting stronger that Omicron causes milder symptoms on average than earlier variants of the SARS-CoV-2 virus. On the other hand, however, the current record surge in cases could still overwhelm some health systems for a while. Omicron may still cause significant if temporary economic damage on top of potentially serious strains on medical systems,” writes Berenberg chief economist Holger Schmieding in an investor note on Tuesday.

Berenberg’s Omicron worst-case scenario is for a 1% first-quarter hit to eurozone and United Kingdom GDP growth rates. The slightly better news: “If so,” speculates Schmieding, “it would be followed by a major snapback once the Omicron wave has run its course, as in 2021 after the 2020/21 winter wave.”

But for now, investors are betting another rally is in the cards.