Pre-market shares: Investors want Omicron answers. They are not getting them yet
“We have to go through a couple of weeks yet with uncertainty,” Dr. Paul Burton, chief medical officer of Moderna, told CNN’s Paula Reid on Sunday.
A number of unknowns scared the financial markets on Friday, when the Dow index fell 905 points, or 2.5%, and registered its worst day in over a year. Oil prices fell more than 10 percent.
There are five questions, as we see it, that edgy investors now want answered. The first three are exactly what public health authorities are trying to find out.
- Is the Omicron variant more transferable?
- Does it increase the risk of serious illness?
- Does it reduce the effect of vaccines?
“The question is, is it a small hit on the vaccine’s effect, or is it a big hit? I think we’ll probably get some preliminary data in the next few days,” Dr. Ashish Jha, dean of Brown University’s School of Public Health , told CNN.
Two additional questions are related to the potential economic effect of the variant.
- How will the authorities react?
- Will consumers adjust their behavior?
“I began this year by warning that the development of the pandemic was the main risk to the global economy,” said Neil Shearing, chief economist at Capital Economics, in a research note on Monday. “News from Omicron, followed by swift action by governments to close borders to curb proliferation, and the sharply negative market response to these incidents, are a reminder of this acute economic vulnerability.”
A number of countries have closed their borders to visitors from southern Africa. The European Union, Australia, the United States, Canada, Rwanda and many others have banned travelers from countries including South Africa, Botswana, Zimbabwe and Namibia. Japan has closed its borders completely to non-resident nationals.
However, it is not clear whether stricter rules can be put in place for a wider range of countries, which hinders international travel on a larger scale.
Should infections begin to increase, countries may also begin to reintroduce restrictions on public life. Curfews for restaurants, orders from home and other mandates – which have already reappeared in Europe – would hurt the economic recovery.
On the radar: Consumers can also make their own decisions to stay home if they fear the variant will grow.
Investment advisers ask their clients to avoid spreading the alarm and wait for more information, even though they admit that this is an important moment.
“We do not recommend panic selling or repositioning,” said Christopher Harvey, senior stock analyst at Wells Fargo. “Conversely, it’s hard to say, ‘Nothing to see here … as you were.’ While not really exciting advice, we think less is more before we can better determine the risk.”
In short: The next few days and weeks may be bumpy as investors react to developments on some of the fronts outlined above. VIX, which measures market volatility, is down 14% this morning. It is still at its highest level since September, as Wall Street enters a tense wait-and-see period.
Shoppers return to the shops to shop for the Christmas holidays
Black Friday does not have the significance it once did for American shoppers who are becoming increasingly comfortable getting offers online.
Sales on Black Friday increased almost 30% from a year ago, according to estimates until 15.00 ET Friday from Mastercard, which tracks payment data in stores and online. In-store sales increased by 43%.
“[This] speaks to the strength of the consumer, “said Steve Sadove, senior adviser at Mastercard.” We expect a positive holiday well beyond Black Friday. “
Clothing sales led the growth, climbing 86% compared to Black Friday a year ago, when shoppers mostly stayed at home and did not have much reason to redecorate their wardrobes.
Get ready: It’s a great way to start the important Christmas shopping season. Retail sales in November and December are expected to grow between 8.5% and 10.5% this year compared to 2020, reaching a record $ 859 billion, according to the National Retail Federation.
But it’s a wrinkle. According to data from Adobe Analytics, online spending on Black Friday was $ 8.9 billion – a decrease from 2020.
“For the first time ever, Black Friday saw a reversal of the growth trend in recent years,” said analyst Vivek Pandya. “Shoppers are strategic in gift shopping, buy much earlier in the season and are flexible when shopping to ensure they get the best deals.”
See this place: Eyes is now on Cyber Monday. Adobe predicts that it will be the biggest e-commerce day of the year, with consumers paying between 10.2 and 11.3 billion dollars. Will it meet expectations?
Economists are now closely monitoring the effect of the Omicron variant on consumer sentiment. It had already gotten worse due to inflation, although customers have continued to pull out their wallets.
Canada leverages its strategic reserves … of maple syrup
Last week, countries around the world announced that they would utilize their strategic oil reserves in an attempt to lower gasoline prices.
In order not to be left out, Canada also utilizes its strategic reserves. But not for crude oil.
Backup: The state-sponsored organization, often referred to as OPEC for payroll syrup, uses its reserves to control syrup prices and supplies. From 2020, Quebec produced 73% of the world’s maple syrup.
The strategic reserve was created to keep syrup in stock during bad autumn seasons or when demand increases. While 2021 was an average year for Quebec’s production, sales increased by 21% compared to last year, which charged the offer.
Next
Pending home sales in the US for October arrive at 10 ET.
Coming tomorrow: Did US spending remain strong in November despite inflation concerns?
