The new variant might be less severe than feared
Upbeat developments surrounding the Omicron coronavirus variant coupled with upbeat economic data pushed Wall Street stocks higher on Wednesday. The S&P 500 gained 1% to get back to record levels. In part, it was due to a rally in Tesla stocks (+7.5%) in response to a report that Musk said in an interview he has sold enough stock following several weeks of his share sales. The Dow Jones rose 0.74% and the Nasdaq Composite added 1.18%. On the data front, the US GDP increased at a 2.3% annualized rate in the third quarter, revised up from the 2.1% preliminary estimate.
Today in Asia, equity investors continued to welcome signs that the Omicron variant might be less severe than feared. In a third consecutive session of gains, MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.55% on Thursday. Japan’s Nikkei 225 was up 0.31% after Japanese Prime Minister Fumio Kishida said he hopes the Bank of Japan continues to make efforts to achieve the 2% price goal.
European markets advanced for the third day on Thursday, with the Stoxx Europe 600 index edging 0.3% higher in early deals. Later today, fresh economic out of the United States could add to upbeat sentiment in the markets if the figures confirm a steady growth in the country’s economy. In particular, the weekly jobless claims, new home sales, and the University of Michigan’s consumer sentiment index will be featured in the docket.
As risk sentiment keeps improving, the dollar stays under pressure nearly across the market. The USD index is barely holding above the 96.00 figure, a break below which would pave the way to this month’s lows around 95.85. In a wider picture, however, the greenback remains within a broader bullish trend due to a hawkish Fed. Also, the pandemic-related uncertainty could reemerge at any point and push the safe-haven USD back to 1.5-year highs.