Home Business Nerves tense on the markets through no fault of Omicron and we understand it from the Nasdaq. Fugnoli (Kairos) explains what the real enemy is today

Nerves tense on the markets through no fault of Omicron and we understand it from the Nasdaq. Fugnoli (Kairos) explains what the real enemy is today

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A decidedly nervous week on the markets with the volatility indicated by the VIX index which reached its highest level since January.

Tensions dictated by the spread of variante Omicron and the uncertainty that this event generates on the prospects for economic growth. Another element of tension of the week, however, was also the words of Jerome Powell. In the hearing in the Senate, the number one of the Federal Reserve hinted that an acceleration on the tapering front (reduction of purchases) is justified in light of the surge in inflation and this will discuss the Fed meeting of 14-15 December.

According to Alessandro Fugnoli, Strategist in Cairo, right there monetary normalization is the main reason for the nervousness in the markets. “If it were on Omicron, i titoli stay at home they would be fine and instead we see them as weak as the rest of the technology, targeted as a proxy by the badgers, ”asserts the expert in his weekly column ‘The Red and the Black’.

From an all-time high of November 19, the Nasdaq it dropped around 7% in two weeks, underperforming other major equity indices.

There are many clues that inflation has become a political priority for the Biden administration. The strong dollar, Powell’s confirmation at the Fed with the go-ahead from Yellen, the shortening of the tapering, the diplomatic offensive on oil and the placing on the market of strategic stocks, all indicate that containing inflation and being able to get to a monthly figure indicating the slowdown is a tactical priority. “Having a falling inflation means having one more chance to convince Senator Manchin to approve the Build Back Better, which is the strategic priority”, asserts Fugnoli, recalling, however, how the descent of oil is for political reasons, but its fundamental they are getting stronger.

“L’structural inflation, the one that will accompany us in the coming years when the transitory wave is over, it is not destined to leave us, but it is a medium-term problem. In short, for now there is only the virus to worry about. The rest is fine ”, concludes the strategist from Kairos.

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