by Nick Rummell
December 23, 2021
https://www.courthousenews.com/wall-str ... lly-rally/
Introduction:
Further Extract:MANHATTAN (Courthouse News) — Investors avoided a blue Christmas after a rocky start to the week, buoyed by promising data on the omicron strain of coronavirus.
Fears over omicron's rapid spread caused the initial rout. Investors regained their footing, however, amid news from Pfizer that its recently approved experimental treatment is effective against the variant, combined with British studies suggesting Covid-19 infections caused by the variant are less deadly than those wrought by delta.
Investors have latched onto the prediction omicron will likely be short-lived and result in fewer deaths than the delta wave. “As such, omicron may cause temporary disruptions in high-frequency economic data and some corporate earnings, but it’s very unlikely to be a sustainable headwind that derails the rally,” Tom Essaye of the Sevens Report wrote.
So far Wall Street’s resilience has proved itself. Wall Street posted large losses early in the week, but by the end of the trading on Thursday it reclaimed those declines and then some. The Dow Jones Industrial Average, which had lost about 400 points on Monday, finished the week up 585 points, while the S&P 500 and Nasdaq took similar a track, gaining 105 points and 484 points, respectively. Markets are closed on Friday for Christmas Eve.
Some experts, such as Simon MacAdam, senior global economist at Capital Economics, say 2022 will still be dominated by inflation. “If omicron further disrupts already stretched supply chains, goods inflation could be higher than we are forecasting, keeping overall inflation higher for longer,” he told investors in a note. “By 2023, most of the factors dragging on headline rates will have run their course, and goods inflation should ease as shortages improve.”