Fed Chair Jerome Powell sounds more hawkish. This strategist explains why
New York (CNN Business)It’s a strong start to the week on Wall Street, where the Dow has climbed more than 600 points amid a rebound from last week’s losses.
The Dow (INDU) was up 1.8%, or some 610 points, mid-morning, while the broader S&P 500 (SPX) climbed nearly 1%. The Nasdaq Composite (COMP), which faced the steepest selloff Friday, continued to be the weakest index, rising only a modest 0.2%.
The market has been in a state of constant volatility since the new Omicron variant of the coronavirus was identified at the end of November.
The variant is now dominating new infections in South Africa, and several European countries have reported spikes in Covid cases. Infectious diseases expert Dr. Anthony Fauci, meanwhile, said early data on the Omicron variant doesn’t suggest it causes severe illness.
The uncertainty surrounding Omicron and its infectiousness, along with the Federal Reserve’s plans to wrap up its pandemic-era stimulus program sooner than first expected, continue to be big themes for investors and potential negative catalysts for equities.
Stocks also pulled back Friday following a weaker-than-expected November jobs report.
Even though Monday is very quiet on the economic data front, there are various reports due this week that have the potential to move the market or change investors’ views of the recovery.
On Wednesday, a look at job openings in October will reveal how the worker shortage is progressing. And on Friday, November consumer price inflation will show whether price increases are getting worse.
Elsewhere, Bitcoin prices have edged higher again, trading up 2%, according to CoinDesk data, following a steep selloff at the end of last week.
In other asset classes, the 10-year US Treasury bond yield has climbed to just below 1.4% Monday morning. The US dollar also rose against its major rivals, up 0.3% per the ICE US Dollar Index.
In commodities, US oil prices climbed 2.5%, or $1.70, to $67.95 per barrel.
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