Will the markets make it through the Omicron crisis?

2021-12-06T18:49:20
Dow Jones markets Nasdaq Omicron US stock indices
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Will the markets make it through the Omicron crisis?

Will the markets make it through the Omicron crisis?: A new trading week begins today, with the continued confusion that began last week after the announcement of the new Omicron strain.

Evest follows the performance of financial markets in the next report.

Topics:

Dow Jones declines for the fourth week in a row and Nasdaq for the second week

Is it time to give up monetary stimulus in the United States?

US stock performance Disappointment

Oil rises after Saudi Arabia’s decision to raise prices for Asia and the United States

 

 

Dow Jones declines for the fourth week in a row and Nasdaq for the second week 

US stock indices declined on Friday and last week.

Investors are concerned about the spread of a new strain of Covid-19.

In addition, they are trying to understand the impact of weak labor market data on the Federal Reserve’s willingness to phase out monetary policy for stimulus.

The Dow Jones index lost 0.9% during the week, ending in the Red Zone for the fourth consecutive week.

The Standard & Poor’s 500 index fell by 1.2%, the Nasdaq fell by 2.6% and, as a result, fell for the second consecutive week.

The Department of Labor said the number of jobs in the U.S. economy increased by 210,000 in November, the lowest rate since December 2020. 

The unemployment rate fell to 4.2 percent, the lowest level since February 2020, down from 4.6 percent in October.

According to the adjusted data, the number of jobs increased in October by 546, not by 531, as previously reported.

On average, experts predicted that the number of jobs would increase in November by 550 thousand and that the unemployment rate would fall to 4.5%.

“I do not believe that this report contains much that could impede plans to” scale back “the asset procurement program more quickly,”
Mark Heppenstall, chief investment officer at Ben Michael Asset Management, to MarketWatch.

In his view, this or the rate hike “could happen much earlier than investors expected three months ago” as the economy continues to recover from the pandemic.

The Dow Jones industrial index fell 59.71 points (0.17%) on Friday to 34580.08 points.

The Standard & Poor’s 500 fell today 38.67 points (0.84%) to 45,388.43.

The Nasdaq composite index declined 295.85 points (1.92%) to 15085.47.

Is it time to give up monetary stimulus in the United States?

On the other hand, the Federal Reserve Chairman (FRB) in Atlanta, Rafael Postek,
expressed earlier that the Fed would be given an opportunity to raise the key interest rate next year if inflationary pressures continued at the current high level. 

According to him, the Federal Reserve must accelerate the termination of the bond buyback program for this purpose.

According to experts: “What we saw in the week that followed the Omicron news was a very severe volatile and panic in the markets.”

This is expected to continue until more is known about the new strain of the coronavirus.

James Ballard, the Federal Reserve Chairman in St. Louis, said on Friday that a strong recovery in the U.S.

economy and rising inflation meant it was time for the Fed to give up the emergency stimulus. 

“The Federal Open Market Commission may wish to consider phasing out the asset buyback program more quickly at future meetings,” he said.

 

US stock performance Disappointment

DocuSign Inc, which develops electronic signature techniques and digital transaction management,
declined by more than 42%, resulting in a decline among components of the Nasdaq index.

The company’s financial performance for the past quarter exceeded expert predictions, but predictions for the current period turned out to be weak.

Smith & Wesson Brands Inc has fallen 28.7 percent, the biggest decline since March 2020.

The firearms manufacturer earned profits and revenues below market expectations in the fourth quarter amid declining demand for its products.

Strum Ruger & Co also fell by 9.8%.

ADRs declined on Friday after Didi Global Inc, the operator of China’s largest online taxi service,
announced its cancellation on the New York Stock Exchange and a public offering in Hong Kong.

Nio and Li Auto Inc fell by 11.2% and 16% respectively.

Online retailers Alibaba Group Holding and Pinduoduo Inc. -fell by 8.3% and 8.2%, respectively, Game developer NetEase Inc. -6.9%. Didi’s own receipts fell by 22.2%.

The United States Federal Trade Commission filed a lawsuit to block Nvidia Corp’s proposal for the acquisition of Arm Ltd.

In a statement, the Federal Trade Commission said that the deal would give one of the largest makers of chips control over the computing technology,
and designs that rival companies rely on to develop their own chips. Nvidia stocks declined by 4.5%.

In the meantime, stock prices of semiconductor manufacturer Marvell Technology Inc. rose. It jumped 17.7% on strong quarterly results.

 

Oil rises after Saudi Arabia’s decision to raise prices for Asia and the United States

Oil prices rose on Monday after Saudi Arabia decided to raise prices for all items supplied to Asia and the United States in January.

The market is also supported by some easing of concerns about the risk of the Omicron strain. 

Bloomberg reported that data from South Africa, where this new variant of COFID-19 has been identified, do not show an increase in hospital admissions. 

US President Joe Biden’s medical adviser, Dr. Anthony Fosse, said there was no evidence yet that Omicron was more severe than other strains.

Brent crude futures for February on the London Futures Exchange rose by $1.51 (2.16%) to $71.39 per barrel.

On Friday, Brent crude rose by $0.21 (0.3%) to $69.88 per barrel.

January futures for West Texas Intermediate crude in electronic trading for the New York Mercantile Exchange (NYMEX) rose by $1.53 (2.31%), to $67.79 per barrel. 

During the previous session, the future fell by $0.24 (0.4%), to $66.26 per barrel.

Brent and West Texas ended in the Red Zone for the sixth week in a row, the longest period of its kind since November 2018.

The price weekly decline of Brent crude is 2.4% and West Texas Intermediate -2.8%.

Saudi Aramco said early in the week that the price of the main item supplied to Asia would rise by $0.6 per barrel in January.

As a result, it will cost $3.3 per barrel more than the Oman and Dubai oil basket – the maximum since February 2020.

The price increase for the United States would be $0.6 from $0.4 per barrel.

 

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