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Strong upward reaction on the Wall, despite the uncertainty for Omicron

LAST UPDATE: 19.15

Major Wall Street stocks rallied on Thursday, with investors tracing the impact the Omicron mutation will have on the US and global economies as the US government re-tightens travel restrictions.

On the dashboard, the industrial Dow Jones strengthened by 643.12 points or 1.89%, with the widest S&P 500 to record an increase of 69.44 points or 1.54%, while the technological Nasdaq gains 121.4 points or 0.80%.

The administration of President Joe Biden has reacted to the Omicron mutation in California by calling on companies to increase the obligation to vaccinate their employees, even though a similar mandate from the federal government has been “frozen” by the federal government.

The White House has again imposed strict travel restrictions, requiring passengers entering the United States to have been tested within the past 24 hours.

Airline, casino and energy stocks are leading the way in gains, recovering from Wednesday’s sell-off. Delta Airlines gained 7%, MGM Resorts 5.3%, while Hilton Worldwide rose 6.3%.

Boeing shares jumped 5.4% after China decided to allow 737 Max aircraft to resume flying in the air.

Investors are expecting more information about the new coronavirus mutation, mainly its transmissibility, but also whether it can go beyond the protection provided by vaccines. The possibility that the US Federal Reserve will reduce its asset purchase program faster than expected is also in the spotlight.

Speaking in the US House of Representatives, Fed Chairman Jerome Powell said: “The economy is very strong, with inflationary pressures of course high, so it’s time to look at the reduction in the asset market program we announced in November. a few months earlier than expected “.

“We remain vigilant with the S&P 500 at a time when the Fed is becoming hawkish in the midst of an inflated market,” said Savita Subramanian, Bank of America Securities senior executive for the US market. He noted that there is a risk of an inflationary blow to household consumption.

However, Bank of America notes that historically December is the strongest month for the S&P 500.

US Treasury Secretary Janet Glenn told a Reuters conference on Thursday that she was ready to use the word “temporary” to describe the current state of inflation in the United States.

“I’m ready to drop the word ‘transient.’

It is recalled that yesterday, the president of the Federal Reserve, Jerome Powell, speaking again to a congressional committee, said he would like to change the central bank rhetoric, removing the word “transient” from the description of inflation, noting that “inflationary pressures” will remain high over the next year. ”.

Of the 30 Dow stocks, 27 are positive and just 3 are negative. The profits are led by those of Boeing, American Express, Visa, while losses are recorded by those of Apple, Merck, Johnson & Johnson.

Macro

Initial U.S. jobless claims rose 28,000 to 222,000 a week through Nov. 27, following a sharp drop last week when new claims fell to a 52-year low.

The big ups and downs of the last two weeks, however, are due to the festive season of Thanksgiving. The government’s process of adapting applications to seasonal changes sometimes creates distortions during the holidays.

The actual number of new applications also fell, to 211,896 last week from 253,518 two weeks ago.

Meanwhile, continuing claims for benefits fell by 107,000 to 1.96 million.

In any case, applications are at low levels and are expected to fall further in the coming months to pre-pandemic levels. New unemployment benefits were as low as 200,000 before the outbreak.

Many people are too scared to return to work, economists say, because they are still afraid of the coronavirus or worried about reopening schools and having to stay home with their children. The Omicron variant also raises concerns.

Companies, for their part, are offering higher wages to attract employees, and wages are growing at the fastest pace in recent years.

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