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Sell first, get answers later. With stocks near lifetime peaks,
the Black Friday reaction to the new fast-spreading virus strain
Omicron was hardly surprising.
But a weekend later, investors look heavily engaged in buying
the dip, as markets take a more balanced view of risks attached
to what the WHO called a "variant of concern".
After their ninth biggest drop ever on Friday, gains in crude
prices topped 5% earlier in Asia and stock futures point to a
solid bounce across Europe and America.
A South African doctor said patients with Omicron have "very
mild" symptoms and investment houses don't look to have budged
that much. Credit Suisse, for example, made no portfolio
changes, staying slight overweight on equities.
Perhaps more telling is that retail traders poured north of $2
billion into U.S. stocks on Friday, setting the second biggest
daily inflow on record, per Vanda Research data.
Of course there are uncertainties and that will likely make for
volatile days heading into the Christmas shopping season.
Understanding the level of severity of the variant "will take
days to several weeks", said WHO. And vaccine maker BioNTech
needs up to two weeks to figure out whether the shot it makes
with Pfizer needs to be reworked.
So while Omicron has spread from Australia to the Netherlands
and governments ban travel and mull lockdowns, markets may also
gamble on central bankers turning more patient in their path
towards rates normalisation.
Lots of speakers from the Federal Reserve and the European
Central Bank are lined up for today. On Sunday, speaking about
risks to the recovery, ECB's Lagarde said: "We now know our
enemy and what measures to take."
Key developments that should provide more direction to markets
on Monday:
* ECB speakers: Governor Lagarde, ECB board members AndreaEnria,
Isabel Schnabel, Pentti Hakkarainen; ECB Vice PresidentLuis de
Guindos * Euro zone consumer sentiment/inflation expectations *
German preliminary CPI/HICP * Fed speakers: Chairman Jerome
Powell, New York PresidentJohn Williams, Governor Bowman *
Emerging markets: Kenya central bank meets; Turkey tradebalance
and bank NPL ratios (This story refiles to fix chart)
(Reporting by Danilo Masoni; Editing by Saikat Chatterjee)
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