Wall Street kicks off the new week by continuing to bet on economic recovery, despite the Omicron variant. The protagonist above all is the jump of the Dow Jones, which rises by 500 points (+ 1.44%), to 35,078 points, benefiting from the purchases that flow into energy, airline and industrial companies.
On the other hand, sales continue to rage on the stocks of hi-tech companies: badly today, in particular, Nvidia, which sells more than 5.6%, and Tesla -4%, down about 3%. The Nasdaq loses 0.25% to 15.050 points, while the S&P 500 is + 0.63% at 4.569 points.
Tom Essaye, author of the Sevens Report, comments on the dynamics of the markets, underlining that “the tech super-caps had been well supported by the expectations of ‘low rates and a’ forever ‘support”. Now, “with the prospect of a rate hike and with this new Fed paradigm, we see investors shift from the hi-tech sector to those other sectors that have better exposure to firmer growth.”
The so-called shares of companies benefiting and have benefited to a greater extent from the reopening are doing well. United shares + 5.4% and Delta Airlines + 4.8% rally. Carnival is up about 5% while Wynn Resorts’ stock is up by more than about 4%.
Ten-year Treasury rates are recovering, which fell last week as a result of the Omicron threat. However, the value remains decidedly contained, growing to just 1.383%.
The trepidation rises for the meeting of the FOMC -14-15 December -, the monetary policy arm of the Federal Reserve, from which great news is expected, after it was President Jerome Powell himself who said that perhaps the time to stop combining the word transitory with the term inflation.
Powell spoke of the need to accelerate the Fed’s tapering, which currently corresponds to a reduction in asset purchases that the US central bank makes monthly to the value of $ 30 billion per month.
The cut, according to some analysts, could be doubled. There are those who believe that the Fed may also begin to address the question of when to start raising fed funds rates.
Crypto stocks under pressure in the premarket, after the sharp thud in Bitcoin prices on Saturday.
Coinbase loses up to -4%, Square loses 3.6%. Bitcoin instead returned to the area between $ 47,000 and $ 49,000 after plunging to $ 42,000, losing around 14% over the weekend.