Omicron Variant & Market Update
Omicron - the new COVID-19 variant, which apparently originated in South Africa was named as a ‘variant of concern" by the WHO last Friday.
- Stocks had their worst day in months on Black Friday, with the S&P 500 down nearly 1,000 points - the most since February 2021.
- Crude oil fell 13.1%, for its largest drop since April 2020.
- The U.S. ordered travel restrictions from South Africa and seven other countries, while Israel banned international travelers from entry and Japan closed borders to new visitors as well.
- Moderna thinks it could develop a new vaccine to fight the new variant by early 2022.
The market’s rebound on Monday appears to be based upon the belief that Omicron’s symptoms could be more mild than other COVID-19 variants, reducing the need for additional restrictions that could impair economic activity. Our team at Covenant Wealth Strategies is closely monitoring the current situation as it develops and more information becomes available.
Economic Weekly Roundup
The November Federal Open Market Committee (FOMC) meeting minutes showed rising concerns about inflation. In addition, the minutes reported that FOMC members would be willing to increase interest rates if prices continue to rise. Moreover, given the present economic progress the Fed would continue the current pace of tapering at least through December.
Unemployment Claims Reach a 50-Year Low
Initial jobless claims reached a 50-year low of under 200,000 amid continued improvements in the job market. The reading came in well below both Bloomberg’s consensus forecast as well as the prior week’s claims. The reading even beat the pre-pandemic trend of around 210,000 continuing claims, which were calculated the week prior to initial filings.
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