US stocks open on a high with Ômicron impacts on the radar

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The US market opened positively this Wednesday (1), as investors seek to understand the impacts of the new variant of the coronavirus, Ômicron, on business and the economy.

The Dow Jones rose 0.79%, to 34,757 points, the S&P 500 grew 1.10%, to 4,617 points, and the Nasdaq was up 1.20%, to 15,721 points.

Jerome Powell, chairman of the Fed (Federal Reserve, US Central Bank) said on Tuesday that the US Central Bank will likely discuss accelerating the reduction in its bond purchases at its next monetary policy meeting, amid the strength of the economy and expectations that high inflation will persist until the middle of next year.

“At this point the economy is very strong and inflationary pressures are high and therefore it is appropriate, in my view, to consider ending the reduction in our asset purchases — which we actually announced at the November meeting — perhaps a few months earlier, and I hope to discuss that at our next meeting in two weeks,” the president said in an audience with the US Senate Banking Committee.

“[Contudo], no one is happy when inflation is 4% or 5%, [ainda mais] when our target is 2%,” Fed Vice Chair Richard Clarida said during a conversation with Cleveland Fed President Loretta Mester.

Consumer price inflation in the United States rose again in October, to 6.2%, and has accumulated in 12 months the biggest increase since November 1990.

On investors’ radar is also the release of the manufacturing index this afternoon from the Institute for Supply Management. Economists, said The Wall Street Journal, expect the survey to show that factories have had another strong month of new orders.

Yields on 10-year Treasury bills, which move inversely to bond prices, rose to 1.477% today from 1.440% the day before.

Commodity and Travel

This morning, the prices of US oil and futures contracts rose, giving signs that the markets would recover from the losses of the past few days. Around 11:30 am, the Brent commodity rose 3.12%, to US$ 71.39, and WTI grew 3.20%, to US$ 68.30.

Oil fell last Friday (26) on account of the Thanksgiving holiday in the United States and because there were signs that Ômicron could reduce the demand for fuel for aircraft, as several countries are suspending international travel.

Passengers flying to the United States will face stricter Covid-19 testing rules, and more countries tighten border controls amid uncertainty about the Ômicron variant of the coronavirus and its ability to circumvent vaccine protection.

The WHO (World Health Organization) said that “widespread travel restrictions will not impede international spread and impose a heavy burden on lives and livelihoods”, but also advised indisposed, at-risk people aged 60 and over and who do not vaccinated themselves to postpone travel.

OPEC

In any case, OPEC and its allies begin two days of meetings today to decide whether to release more oil into the market or restrict supply amid falling prices and fears that the Ômicron coronavirus variant could weaken global energy demand. .

Commodity prices dropped to close to $70 a barrel on Tuesday from $86 a barrel in October, registering their biggest monthly drop since the pandemic began, as the new variant raised fears of an oversupply .

In November, Brent fell 16.4%, while WTI fell 20.8%, the biggest monthly drop since March 2020.

“The threat to oil demand is genuine,” said Louise Dickson, senior oil markets analyst at Rystad Energy. “Another wave of lockdowns could result in a loss of oil demand of up to 3 million barrels per day in the first quarter of 2022.”

Reference: CNN Brasil

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