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The market has shown a healthy bounceback in the early trading hours on Monday. Apart from COVID variant fears, economists are expecting a healthy bounce back in the economic data.
During the early morning trading on Monday, November 29, US stock futures bounced back after Friday’s massive sell-off. Earlier today, the futures for Dow Jones Industrial Average surged 208 points or 0.6%. Similarly, the S&P 500 futures added 0.82% while the Nasdaq 100 futures surged by 1.07%. Last Friday was possibly the worst day for the market after October 2020. All of the three major indices crashed anywhere between 2-2.5%. Even though the market is showing signs of a bounce-back, Wall Street stock investors are closely observing the developments with the spread of the Omicron Covid variant.
Originated in South Africa, cases with the Omicron variant have been detected across Europe and other parts of the world. Several countries have also suspended direct flights coming from South Africa. In a note to investors last Friday, Keith Lerner, co-chief investment officer at Truist Advisory Services said:
“The pandemic and COVID variants remain one of the biggest risks to markets, and are likely to continue to inject volatility over the next year(s). It’s hard to say at this point how lasting or impactful this latest variant will be for markets.”
Even the World Health Organization (WHO) has raised a red flag over the spread of Omicron. The global organization has also called it a ‘variant of concern’. One of the major concerns among scientists is the large number of mutations in Omicron. As per WHO, preliminary evidence shows that the strain has an increased risk of re-infection.
Vaccine Developers Are Making Key Observations on the Omicron Spread
Several drug manufacturing companies and vaccine makers have started investigations at their end. They have already started testing by observing the behavior of the Omicron mutant.
It will be interesting to see whether if the existing vaccines can show some resistance to the Omicron variant. Or else, some new formulations might be coming in place soon. On Sunday, Paul Burton, Moderna Chief Medical Officer, said that the drugmaker can release a reformulated vaccine Omicron variant by early 2022.
Apart from COVID, there are some key economic events ahead this week. The November jobs report on the coming Friday will likely show solid jobs growth. Economists surveyed by Dow Jones expect the addition of 581,000 jobs. On Wednesday, the Institute of Supply Management manufacturing will release its survey. Economists are expecting strong growth in economic activity.