Omicron covid fears and an accelerated taper schedule disclosed by Fed Chairman Powell during his testimony to Congress this past week put downside pressure on risk assets across the board. Not much is known about the new variant other than it contains elements of the common cold and no one has yet to die from it according to the CDC. The lead South African scientist who made its discovery has indicated its symptoms are mild and less severe than the original COVID-19 virus. The markets had a tremendous move from early October and profit-taking events are normal. There is always a narrative attached to every drop.
The S&P 500, the Dow, and the Nasdaq all closed the week below their 50-day moving averages, but apart from the Dow, the benchmarks are still well clear of their 200-day moving averages. The VIX also spiked above 35 – its highest reading since January of 2021.
Economic data from this past week:
Non-farm Payrolls (NFP): Missed
ISM Manufacturing and Services: Beat
ADP payrolls: Beat
Consumer Confidence: Missed
Upcoming data this week:
Trade Balance report on Tuesday
Jolts Job Openings on Wednesday
CPI and Consumer Sentiment on Friday