Wall Street up after yesterday’s negative close, triggered by the Centers for Disease Control and Prevention (CDC), which confirmed the first case of Omicron in the United States. On the eve, the Dow Jones Industrial Average lost 461.68 points to 34,022.04 points, while the S&P 500 lost 1.18% to 4,513.04 points. The Nasdaq Composite fell 1.83% to 15,254.05.
Today the Dow Jones bounces jumping up to +400 points; the S&P 500 rose 0.75% while the Nasdaq underperformed the indices with a rise of just 0.13%.
The stocks that had ended up in the crosshairs on the eve of the session are back on the rise, weighed down by the prospect of new lockdowns and travel restrictions, therefore the stocks of the airlines, the hotel sector and the groups that manage cruises: up Boeing, Norwegian Cruise, Royal Caribbean and MGM Resorts International.
In a note to clients, analysts at TD Securities note that “investors are becoming more cautious not only for the Omicron variant but also for the prospect of faster tapering.” A perspective that was rekindled by the same statements made during his hearing in the US Congress by the head of the Fed, Jerome Powell.
Watch out for the VIX fear index – CBOE Volatility Index -, which flew to 31.12 points yesterday, compared to levels below 27 points at the beginning of the week. The index turns around falling by more than 6%, and thus returning below the threshold of 30 points. 10-year Treasury rates are under pressure at 1.427%, confirming the persistence in the markets of fears for the Omicron variant.
The weekly US report on initial applications for unemployment benefits was published today, which showed that, in the week ending November 27, the number of American workers who applied for the first time to receive benefits increased. of 28,000 units to 220,000 units, better than the 240,000 units expected by analysts interviewed by the Dow Jones news agency. The previous week’s figure was revised down from the 199,000 units initially disclosed to 194,000, a record low since 1969. Confirming the good health of the US labor market, the four-week moving average stood at 238,750. at a minimum since the week ending March 14, 2020. Overall, the number of US workers who continue to benefit overall from unemployment benefits is 1,956,000, better than the estimated 2 million, and at a minimum since March 14 of 2020. Also from the US labor market, the employment report drawn up by the ADP company was released yesterday: the report showed that, in November, the US private sector created 534,000 new jobs, better than growth estimated by analysts, equal to +506,000 units.
Great expectations for the release of the US employment report for November, which will be published tomorrow, Friday 3 December:
the expectations of the analysts interviewed by Dow Jones are for an increase of 573,000 new jobs, after +531,000 in October. The US unemployment rate is expected to decline to 4.5%.
The Beige Book, the report on US economic conditions that the Fed publishes eight times a year, was published yesterday evening. The report found that
“Economic activity grew at a modest to moderate pace in most Federal Reserve districts in October and early November.”
“Several districts have pointed out that, despite the solidity of demand, growth has been limited by interruptions in the supply chain and the shortage of the workforce – the report reads – Consumer spending has increased modestly; the Low inventory levels hampered sales of some products, particularly light vehicles. “
Regarding the crucial issue of inflation, “there have been several increases in input costs, due to strong demand for raw materials, logistical challenges and shortages in the labor market”.
“The increased availability of some inputs, particularly semiconductors and some steel products, has helped to ease some price pressures.”
The Beige Book therefore confirmed the problem of inflation in the United States, however also indicating an easing of pressures in some cases.
That said, “solid demand in general has allowed firms to raise prices without much resistance, although contractual obligations have prevented some firms from raising prices.”