Frankfurt, New York The first case of infection with the new Omicron variant of the coronavirus in the USA is troubling Wall Street. The US benchmark index lost 1.3 percent to 34,022.04 points. The technology-heavy Nasdaq fell 1.8 percent to 15,254.05 points and the broad S&P 500 lost 1.2 percent to 4,513.03 points. According to the US Disease Agency, omicrons were found in a fully vaccinated person who returned from South Africa. It was the worst two consecutive days for stocks since October 2020. “Omikron is hitting us on the St. Nicholas rally,” said one trader.
At the stock exchange opening, Wall Street had received a boost from slightly better-than-expected labor market data. In addition, the initial shock about the US Federal Reserve Chairman Jerome Powell’s announced accelerated throttling of securities purchases has been overcome, said Rick Meckler, partner at asset manager Cherry Lane. “Investors are realizing the Fed needs to adjust its policies.” Passivity could pose a greater risk to markets than opposing inflation.
Powell had reaffirmed before a committee in the House of Representatives that he would consider reducing bond purchases more quickly in view of rising inflation. The Fed chief believes that it is unlikely that this could lead to market turbulence.
According to the Federal Reserve (Fed), the US economy has recently grown at a moderate to moderate pace. The outlook for the near future remains positive overall in most Fed districts, announced the Fed in its “Beige Book”. In the economic report, which is based on economic contacts from the regions, the Fed also pointed out that delivery bottlenecks and a shortage of workers were causing price pressure. Prices have risen at a moderate to robust pace, with inflation occurring throughout the economy. Many of the twelve Fed districts have also reported difficulties with companies in filling positions, which has led to salary increases.
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Chris Senyek, strategist at Wolfe Research, wrote in a communication to his clients: “We believe that the recent sell-off is a longer-term buying opportunity. However, investors who want to avoid a potentially large loss (and avoid potential price gains) should wait until the US Federal Reserve’s meeting on December 15th ”.
US stock market expert Koch: “Two factors are causing uncertainty on Wall Street”
Look at individual values
Salesforce: In terms of individual stocks, the shares of Salesforce came under pressure. The SAP rival raised its full-year targets. But this remains below market expectations, wrote analyst Brent Thill of the investment bank Jefferies. The problems with the subsidiary MuleSoft would certainly be solved quickly. Salesforce titles slipped nearly twelve percent.
Moderna: Moderna papers also collapsed nearly twelve percent. The pharmaceutical company is threatened with lawsuit against rival Arbutus Biopharma for patent infringements in the manufacture of coronavirus vaccines. Arbutus could collect up to a billion dollars in license fees annually, but the lion’s share goes to its partner Genevant, calculated analyst Dennis Ding of the Jefferies investment bank. Against this background, the Arbutus rate doubled at times to $ 6.50. The titles of the Genevant dam Roivant jumped 34 percent.
Merck: The shares of Merck & Co could not hold their profits in the weak overall market and ultimately fell by 0.6 percent. An advisory body to the US FDA has recommended emergency approval for a corona drug from the pharmaceutical manufacturer. Although the recommendation is not binding on the FDA, the authority usually follows the assessment of the consultant.
Energy: Energy stocks posted strong gains. Occidental Petroleum and Baker Hughes stocks rose more than three percent each, while WTI oil prices rose a little four percent to nearly $ 69 a barrel.
Trip: The losers increased and were again dominated by numerous papers from the travel and leisure sector and related industries. The shares of the aircraft manufacturer Boeing, for example, fell by almost 5 percent in the Dow. Delta Air Lines, United and American Airlines stocks fell seven to around eight percent.
Hewlett Packard Enterprise: For the shares in Hewlett Packard Enterprise, the Nyse went up and down by 1.0 percent. The information technology company had also disappointed with its outlook. However, the strong order intake and solid cash inflow were seen positively on the market.
Goldman Sachs / Amazon: Both stocks benefited from CNBC announcement that the bank is launching a cloud service from Amazon for Wall Street retailers. The new service is called GS Financial Cloud for Data with Amazon Web Services. Goldman stock rose 1.8 percent, while Amazon rose 0.7 percent.
GM: General Motors (GM) braced themselves against the downward trend in the S&P 100 and gained 0.3 percent. The largest automaker in the United States became more optimistic about the current fiscal year despite the continuing shortage of chips in the industry.
Doordash: The stock of the food delivery company rose more than 1.3 percent after the analyst firm Gordon Haskett upgraded the stock from “Hold” to “Buy”. The company said the Omikron variant could trigger an upswing for the food delivery app if Covid fears flare up again.
More: Fed Chairman Powell warns of continued high inflation – and holds out the prospect of a reduction in bond purchases