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Rising Omicron Cases, Tesla Pressure Eases, Bitcoin - What's Moving Markets

Economy Dec 29, 2021 05:24AM ET
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© Reuters

By Peter Nurse  

Investing.com -- Omicron cases continue to soar in both Europe and the Americas, but stock markets remain buoyant. Elon Musk has exercised all of his Tesla (NASDAQ:TSLA) options, potentially reducing the selling pressure on the stock, while U.S. crude inventories fall again. Bitcoin remains highly centralized. Here's what you need to know in financial markets on Wednesday, 29th December.

1. Omicron cases soar

Risk sentiment may be on the rise as the year draws to a close, but so are Covid cases. This means trading could be volatile as investors return in force next year.

The World Health Organization’s weekly update, published on Tuesday, showed that the number of new Covid infections grew by 57% in Europe in the week before Dec. 26, and by 30% in the Americas region.

France led the way, reporting Europe’s highest ever daily number with 179,807 cases on Tuesday, but Italy, Greece, Portugal and England all reported record highs as well.

While there are some mobility restrictions in place in Europe, many national governments have been reluctant to implement wholesale lockdowns again, clinging to studies that suggest the dominant Omicron strain of the Covid-19 virus is less harmful than the previous Delta variety.

It’s debatable how long this stance can last if cases continue to soar, especially with the World Health Organization warning that the surge in cases will push health systems towards the brink of collapse.

2. Stocks to edge higher; Omicron in focus

U.S. stocks are set to open marginally higher Wednesday, continuing the recent rally amid optimism that the Omicron variant will not be as economically damaging as first feared.

By 5:25 AM ET (1025 GMT), Dow Jones futures were up 45 points, or 0.1%, S&P 500 futures were up 10 points, or 0.2% and Nasdaq 100 futures climbed 60 points, or 0.4%.

The blue chip Dow Jones Industrial Average closed almost 100 points higher on Tuesday, its fifth straight day of gains, while the S&P 500 and Nasdaq Composite dropped marginally.

The number of Covid cases are on the rise in the U.S., with more than 4.1 million Covid cases this month, according to data from Johns Hopkins University, well above November’s tally of 2.54 million.

However, the Biden administration has made it clear that a national lockdown is not on the cards while the Centers for Disease Control and Prevention recently shortened its isolation recommendation for people who test positive if they don’t have symptoms. 

In corporate news, Apple (NASDAQ:AAPL) suspended operations for its iPhone product line at Foxconn in Sriperumbudur, India, citing poor working conditions, while JD.com (NASDAQ:JD).com has increased its share repurchase scheme to $3 billion from $2 billion.

3. Bitcoin still too centralized

The recent selling in Bitcoin continued Wednesday, with the world's biggest and best-known cryptocurrency dropping over 3% to $47,668. This follows on from a fall of over 6% on Tuesday, meaning the digital currency is down 31% from the year's high of $69,000 on Nov. 10.

The cryptocurrency market has come into the mainstream of investor thinking this year, with Bitcoin hitting $1 trillion in market value for the first time in February.

That said, a new study finds that after more than 12 years in existence holdings of Bitcoin are still concentrated in too few individuals. According to a study by the National Bureau of Economic Research, the top 1% Bitcoin holders own 27% of the 19 million Bitcoin currently in circulation. 

“This inherent concentration makes Bitcoin susceptible to systemic risk,” researchers Igor Makarov and Antoinette Schoar wrote, “and also implies that the majority of the gains from further adoption are likely to fall disproportionately to a small set of participants.”

Read also: 5 Cryptocurrencies Beyond Bitcoin To Keep On Your Radar In 2022

4. Tesla selling pressure eases

Investors in Tesla, the American electric vehicle manufacturer, will be pleased to hear that CEO Elon Musk has exercised all of his options expiring next year, potentially signaling an end to his stock sales.

Tesla shares lost about a quarter of their value after Musk in November asked his followers on Twitter if he should sell 10% of his holding, primarily to pay a tax bill.

Musk said last week that he would reach his 10% target "when the 10b preprogrammed sales complete," something that the company said was done on Tuesday. 

5. Crude helped by falling U.S. inventories

Oil prices stabilized Wednesday, after the previous session’s rally as industry data pointed to a large fall in U.S. crude oil stockpiles, suggesting continued demand from the world’s largest consumer.

By 5:25 AM ET, U.S. crude futures were down 0.1% at $75.92 a barrel, and Brent futures rose 0.1% at $78.78 a barrel. Both contracts are trading near their highest levels in a month.

Data from the American Petroleum Institute, released late Tuesday, showed U.S. crude stocks fell by 3.1 million barrels in the week ended Dec. 24. 

Official data from the U.S. Energy Information Administration are due later Wednesday, and if the draw is confirmed it would be a fifth consecutive weekly decline, the longest run since September.

The global recovery from the Covid pandemic, the rise of the Omicron variant notwithstanding, coupled with the cautious approach of the Organization of Petroleum Exporting Countries in restoring supply is pushing crude towards its biggest annual gain in more than a decade.  

OPEC and its allies including Russia, a group known as OPEC+, is due to meet next week to assess production policy heading into 2022.

 

 

Rising Omicron Cases, Tesla Pressure Eases, Bitcoin - What's Moving Markets
 

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Comments (10)
LARRY HYAK
LARRY HYAK Jan 05, 2022 2:48PM ET
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Your comment statement sounds ominous.....and uncertain...
Miriam Morkhul
Miriam Morkhul Dec 30, 2021 5:54AM ET
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Someone with the flu scratches his nose before leaving his car. He puts on a mask and shows his covid pass to enter groceries store. He carefully selects fruits and veggies. This guy is fully capable of catching and TRANSMITTING the flu. An a symptomatic person meeting in a hotspot of other "vaccinated" is the problem.
Dave Jones
Dave Jones Dec 29, 2021 3:14PM ET
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jabbing myself 50 times and still getting covid...I need more jabs. I think there's a lack of critical thinking here.
Dave Jones
Dave Jones Dec 29, 2021 3:07PM ET
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ooooh I'm frightened!!! I need to get my booster urgently to save me
Stephen Towne
Stephen Towne Dec 29, 2021 8:41AM ET
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Omicron = vaccine injury
Indiana Jones
Indiana Jones Dec 29, 2021 8:41AM ET
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Please don't get vaxed and continue to spread FUD and let natural selection take its course. It's people like you who are part of the reason covid is still spreading. Maybe if you knew people who died from covid you'd think differently. Better, you'll get covid and disappear.
Ron Love
Ron Love Dec 29, 2021 8:41AM ET
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Indiana Jones Yeah, natural immunity is better than immunity from the jab, that’s “nature taking it’s course”. 🤣
King Power
King Power Dec 29, 2021 7:18AM ET
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OPEC+.. Thank you Brandon!
Alloysius Teng
Alloysius Teng Dec 29, 2021 6:02AM ET
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masses are not wearing masks when they are out... so can expect more to get it... look at England football crowds, the peoples in France.. Majority are not wearing masks ...
Alloysius Teng
Alloysius Teng Dec 29, 2021 6:01AM ET
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masses are not wearing masks when they are out... so can expect more to get it... look at England football crowds, the peoples in France.. Majority are not wearing masks ...
Ron Love
Ron Love Dec 29, 2021 6:01AM ET
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Masks do not work to slow the spread of a respiratory virus.
King Power
King Power Dec 29, 2021 6:01AM ET
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Mask only work in a sterile medical environnement. You're lucky Covid isn't as deadly as other bacteriological weapons in existence. Good luck in that belief!
Ron Love
Ron Love Dec 29, 2021 5:55AM ET
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OMIIICROOOON!!! Doom!!! 🤣🤣🤣
jason xx
jason xx Dec 29, 2021 5:46AM ET
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Every share Musk sells is replaced by options aren't they. He only sold to exercise options not pay a tax B S
Ron Love
Ron Love Dec 29, 2021 5:46AM ET
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You’re wrong. Exercising employee stock options is a taxable event. He also takes no salary from SpaceX or Tesla, he isn’t going to go into debt to exercise 23.6M ESOs, selling stocks is his only legit option to buy the options and pay the IRS + CA taxes.
Fabrizio Fusaro
Fabrizio Fusaro Dec 29, 2021 5:46AM ET
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Ron Love you know he sold more the what he needed to pay taces to excercise option. So stop spreading the poor novel of the overtaxed guys that doesn’t want to go in debt.
Dec 29, 2021 5:46AM ET
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Fabrizio Fusaro 10% of Tesla is $150 billion !.. therefore fake news media are sensantionally misleading !.. its 10% options not 10% stake !.. if he sold 10% his networth will be $150 billion !… !!
Indiana Jones
Indiana Jones Dec 29, 2021 5:46AM ET
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You have no idea what you're talking about or how the taxation of options exercises works. Please stop posting wrong info about topics on which you have zero level of expertise.
Ron Love
Ron Love Dec 29, 2021 5:46AM ET
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Fabrizio Fusaro I never said he didn’t. He sold a bit above what he needed to exercise his options because of the Twitter poll results he said he would abide by, exercising the options would not be enough by themselves to sell 10% of his stake in Tesla, which he accomplished by adding discretionary sales to his 10B5-1 plan.
 
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