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Investors cling to hope as Omicron spreads, shares rebound

Stock MarketsNov 29, 2021 04:27PM ET
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2/2 © Reuters. A man wearing a protective face mask amid the coronavirus disease (COVID-19) outbreak, looks at an electronic board displaying Japan's Nikkei Index outside a brokerage in Tokyo, Japan, September 24, 2021. REUTERS/Kim Kyung-Hoon 2/2

By Matt Scuffham and Dhara Ranasinghe

NEW YORK/LONDON (Reuters) - A semblance of calm returned to world markets on Monday as investors waited for more details to assess the severity of the Omicron coronavirus variant on the world economy, allowing battered stocks and oil prices to rebound.

Global stocks rallied, oil prices bounced and safe-haven bonds lost ground as markets latched onto hopes the new variant would prove milder than initially feared.

The Dow Jones Industrial Average rose 236.6 points, or 0.68%, to 35,135.94; the S&P 500 gained 60.61 points, or 1.32%, at 4,655.23; and the Nasdaq Composite added 291.18 points, or 1.88%, at 15,782.83.

The pan-European STOXX 600 ended up 0.7%, logging its best day in a month and recovering some of Friday's 3.7% slump triggered by concerns around the newly discovered variant.

MSCI's gauge of stocks across the globe gained 0.67%.

News of the variant triggered alarm and a sell-off on Friday that wiped roughly $2 trillion off the value of global stocks as countries imposed new restrictions for fear the variant could resist vaccinations and upend a nascent economic reopening after a two-year global pandemic.

Omicron, detected in South Africa last week, has been found as far as Canada and Australia. The World Health Organisation said on Monday the heavily mutated variant poses a very high risk of infection surges.

Still, investors drew comfort from signs that its impact might not be as grave as feared. In South Africa a top infectious disease expert said existing COVID-19 vaccines are probably effective at preventing severe disease and hospitalisation.

"Right now the market is reacting positively to statements that this variant is not going to be a major issue but there still remains a fair amount of concern," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

A South African doctor who was one of the first to suspect a new strain said on Sunday patients so far appeared to have mild symptoms.

"It was reported the new strain of the virus is 'unusual but mild' and that seems to be the driving force behind the rally in stocks today," said David Madden, market analyst at Equiti Capital.

Graphic: Morning bid https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgdnrlpb/Morning%20Bid.PNG

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4%, but found support ahead of its 2021 low. Japan's blue-chip Nikkei fell 1.6% as the country moved to bar foreigners to head off the Omicron strain.

Oil prices rallied, after plunging more than 10% on Friday in their biggest one-day drop since April 2020.

U.S. crude futures settled at $69.95 per barrel, up 2.6%. Brent futures settled at $73.44 per barrel, up 1%.

Speculation that oil producing group OPEC and its allies, known as OPEC+, may pause an output increase in response to the spread of Omicron aided the oil price rebound.

Graphic: Brent bounce https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnbkqapq/brent.PNG

SHIFTING EXPECTATIONS

European Central Bank policymakers sought to reassure investors rattled by the new variant, arguing that the euro zone's economy had learned to cope with successive waves of the pandemic.

This encouraged a move out of safe-haven bond markets, which had rallied on Friday as investors priced in the risk of a slower start to rate hikes by the U.S. Federal Reserve, and less tightening by some other central banks.

Benchmark 10-year notes last fell 9/32 in price to yield 1.5141%, from 1.485% late on Friday day.

European sovereign bond yields rose, with latest inflation numbers highlighting the challenges ahead for the ECB.

German inflation is set to surpass the 5% threshold in November for the first time in nearly three decades, regional data from several states suggested on Monday.

Gold prices eased, resuming a broad decline from the previous week, as the dollar firmed and risk sentiment recovered.

U.S. gold futures settled 0.2% lower at $1,782.30.

The dollar index rose 0.07%, with the euro down 0.32% to $1.1281.

Graphic: Global asset performance http://fingfx.thomsonreuters.com/gfx/rngs/COMMODITIES-ASSETS/010031B62XZ/index.html#section/assets

Graphic: World FX rates http://fingfx.thomsonreuters.com/gfx/rngs/GLOBAL-CURRENCIES-PERFORMANCE/0100301V041/index.html

Investors cling to hope as Omicron spreads, shares rebound
 

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Comments (21)
Fong SH
Fong SH Nov 29, 2021 9:52PM ET
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What hope are you talking about? Alll these propagandas are preplaned. Human lives are lost and you're talking & writing about financial markets investments? One day the news is saying Covid-19 & other disease are deadly, another day the news is saying financial markets are doing well, reacted well to the virus news? Can you assured the world that it is safe haven now?  Write with some concience please.
Darrell Peterson
Darrell Peterson Nov 29, 2021 8:45PM ET
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Cling and hope , the only strategy needed to make a fortune as a investor. Omg, good Lord, we are doomed.
Jack Zydron
Jack Zydron Nov 29, 2021 8:54AM ET
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Really and this was very alarming? +1000 today! Patients who contracted it complain of fatigue, head and body aches and occasional sore throats and coughs, said Angelique Coetzee, who is also chairwoman of the South African Medical Association.
Miriam Morkhul
Miriam Morkhul Nov 29, 2021 8:54AM ET
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I have had those symptoms every season annually since i was 1 year old.
Daniel Hpr
Daniel Hpr Nov 29, 2021 6:39AM ET
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Brandon media crash Oil peice
Jack Zydron
Jack Zydron Nov 29, 2021 1:09AM ET
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cases down, deaths down ....
Jack Zydron
Jack Zydron Nov 29, 2021 1:08AM ET
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shopping Monday, greendays ahead.
Duke Maverick
Duke Maverick Nov 28, 2021 11:19PM ET
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the new variant is supposed to name Xi. True fact!
Sean Livingstone
Sean Livingstone Nov 28, 2021 11:19PM ET
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Racist. You could do Chinese surnames, and anything Chinese... but other races are not ok. This is the racism against Chinese... you have not forgotten Chinese Exclusion Act.
Jamie An
Jamie An Nov 28, 2021 11:19PM ET
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Xi is dictator.
dog log
dog log Nov 28, 2021 11:13PM ET
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Alright. I'm going all-in just so the stocks can crash. Because I'm just that unlucky.
Stan Smith
Stan Smith Nov 28, 2021 10:55PM ET
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How?? Omicron along with inflation is getting worse day by day!
perplexed76 .
perplexed76 . Nov 28, 2021 10:55PM ET
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for economy, not for markets!
Chris Hall
Chris Hall Nov 28, 2021 10:55PM ET
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welcome to the ponzi scheme
perplexed76 .
perplexed76 . Nov 28, 2021 10:38PM ET
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virus rally in December. Sensational levels. FED tapering is over, more stimulus, more hopes.
Tyrone Jackson
Tyrone Jackson Nov 28, 2021 10:20PM ET
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All they have to do is come out and say lockdown and the market crashes 2-3 % Mederna up 25% Friday. Think about it- they will front run everything. It’s not really a market anymore Just go long with their game is the best you can do.
Selfmade DC
Selfmade DC Nov 28, 2021 10:20PM ET
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Had to screenshot this one
Dan Lisovich
Dan Lisovich Nov 28, 2021 10:17PM ET
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futures look good 👍. I'm staying the course for at least tomorrow. hopefully, everyone will have settled down after the weekend.
Dan Lisovich
Dan Lisovich Nov 28, 2021 10:16PM ET
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futures look good 👍. I'm staying the course for at least tomorrow. hopefully, everyone will have settled down after the weekend.
Jamie An
Jamie An Nov 28, 2021 9:37PM ET
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Biden administration wants fear in market to acquire mamaging inflation, oil price, Russia and Opec+ etc... But always market wins mnipulation. Look at the Future index! Nasdaq! Dow!
Mario tragik
Mario tragik Nov 28, 2021 9:37PM ET
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lmao what a joke this market is.
Gold Follower
Gold Follower Nov 28, 2021 9:37PM ET
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XD sure thing
John Healy
John Healy Nov 28, 2021 9:27PM ET
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Call your representatives and senators and demand NO LOCKDOWNS!
James Vandervest
James Vandervest Nov 28, 2021 9:00PM ET
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Fauci's mutated cold virus- which has mutated into a very infectious cold has no effect on my investing strategy, except when the media fear mongering tanks markets, then I have to work three times as hard. Stop already!
Sean Livingstone
Sean Livingstone Nov 28, 2021 8:55PM ET
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China locked down, and many nations refused to follow the same. Still want to blame China? Shall I blame h1n1, 2008 recession, Vietnam War agent orange, Diego Garcia, and all the innocent civilians who died by us and uk bombing? Yeah, all presidents from the USA should go to jail.
Matt Novakovich
Matt Novakovich Nov 28, 2021 8:55PM ET
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Except Trump
Sean Livingstone
Sean Livingstone Nov 28, 2021 8:55PM ET
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Not a fan of Trump, but he didn't start any war. That's a fact.
Jamie An
Jamie An Nov 28, 2021 8:55PM ET
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Yes, covid 19 is comes from chinese lap. Doesn't it? Then show me your hands.
Sean Livingstone
Sean Livingstone Nov 28, 2021 8:55PM ET
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You don't have proof...media was saying saddam had WMD.. Did you buy into that?
Sean Livingstone
Sean Livingstone Nov 28, 2021 8:55PM ET
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USA causes 2008 recession right in front of us, that could be prevented. Did you ask usa to pay? Racist. You only worship usa and cia.
John Tierney
John Tierney Nov 28, 2021 8:25PM ET
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Omicron is a joke haha
S S Shet
pingo_0070 Nov 28, 2021 7:12PM ET
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covid is no more a virus ..it has become a market manipulator ...
Ric Later
riclater211 Nov 28, 2021 6:54PM ET
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grow up people. they will use the flu boogie man until you refuse the lie
 
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