Wall Street shares advance as Omicron conducts choppy trading

Wall Street’s main stock gauge rose slightly on Thursday, partially recovering from the drops in the previous session, with the Omicron variant of the coronavirus continuing to drive market volatility.

The S&P 500 rose 0.9% in morning trading in New York City, as economically sensitive banking and industrials stocks recouped some of the losses recorded in the previous two sessions. A day earlier, the benchmark stock index had gained in early trades before closing down 1.2%, marking its largest intraday move since March.

The technology-focused Nasdaq Composite rose 0.5%.

In Europe, the regional Stoxx 600 index fell 1.2%, London’s FTSE 100 fell 0.6% and Frankfurt’s Dax fell 1.4% after German executives agreed to impose strict social restrictions on unvaccinated people.

Stock market volatility has been high since last Friday, when the World Health Organization declared Omicron a “variant of concern” due to its high number of mutations and vaccine makers made varying predictions about its ability to. escape existing jabs. On Wednesday, the United States announced that it had identified its first reported case of Covid-19 caused by the Omicron variant.

Variation-induced uncertainty has prompted some fund managers to sell stocks to lock in this year’s gains, although choppy market conditions are prompting short-term traders to look for bargains. “As the end of the year approaches, our clients are saying they just want to take risks on the table,” said Rebecca Chesworth, senior equity strategist at State Street’s SPDR ETF unit.

The Vix, the so-called Wall Street fear gauge that measures expected stock market volatility, traded at around 30 on Thursday, above its long-term average of around 20.

“Anytime the Vix is ​​trading at these levels it tends to signify a decent buying opportunity, as it can be a contrarian indicator,” said Gregory Perdon, co-chief investment officer at Arbuthnot Latham.

Governments have rushed to tighten travel restrictions in response to the spread of the new variant. US President Joe Biden was due to announce new measures later Thursday to slow the winter’s spread of the virus.

The yield on the 10-year US Treasury bill was broadly stable at 1.44%. This is down from around 1.65% a week ago, reflecting a rise in the benchmark government debt security’s price as investors placed cash in the safe-haven asset. Bond yields move in the opposite direction to prices.

Brent crude rose 1.3% to $ 69.82 per barrel, after fluctuations in recent days. The producer group Opec + agreed on Thursday to increase its production by 400,000 barrels per day in January, as previously planned.

In Asian stock markets, Hong Kong’s Hang Seng index rose 0.5% and Tokyo’s Nikkei 225 fell 0.7%.

Investors hope Omicron will prove to be as manageable for policymakers and vaccine producers as the Delta variant, which sent stocks tumbling in July before the US and European stock markets hit record highs last month. .

“It’s not worth panicking,” said Jeremy Gatto, multi-asset investment manager at Unigestion. “Vaccines are becoming completely ineffective and the risk of further blockages is not our baseline scenario, but obviously the short-term risks to the markets have increased.”

Not covered – Markets, finance and strong opinion

Robert Armstrong dissects the most important market trends and explains how the best minds on Wall Street are reacting to them. Sign up here to receive the newsletter straight to your inbox every day of the week

Comments are closed.