Omicron’s horror can put pressure on US stocks.Resume risky transactions

S & P Weekly Outlook: Slightly bearish

  • Volatility has skyrocketed in recent years due to growing concerns about pandemics.
  • NS S & P 500 It is on a downtrend as traders reduce their exposure to risk assets
  • The basic background continues to support most US stocks, Strong corporate earnings and constructive profit outlook, The uncertainty of the Omicron variant drive Short-term price behavior

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Wall street Recently I’m on a roller coaster. Friday After Thanksgiving holidays, US stocks fell on fear of a pandemic, but after some recovery on Monday, they signaled that the Fed could accelerate on Tuesday and Wednesday, plunging. QE winddown process And the CDC First case Of the country’s Omicron COVID-19 variant.We saw some relief as the dip buyers stormed on Thursday, but the seller resurfaced shortly before the weekend. Discard the next stock mixture U.S. economic data And anxiety about coronavirus.

last week, There isn’t much reason to be optimistic yet. The beginning of December is usually a good time for things like the S & P 500. Equity index, Fed’s recent pivot for faster tapering More importantly, the uncertainty about the course of the ongoing health crisis Weakened Risk your appetite. With little information about Omicron stocks at this time, common cautious sentiment among investors remains overnight, with headlines for new infections in the U.S. being talked about, and Argos continues to abandon stocks. Probably.

In the current environment, volatility is likely to remain elevated, with the main average being (S & P 500, Dow, Nasdaq 100, Russell 2000), especially reopening themes (airlines, cruises, restaurants, hotels, etc.) Biased to the negative side..Despite this outlookBet on direction may be a dangerous suggestion until you learn more about Omicron, But tHats don’t mean there’s no chance.. That said Traders can benefit from ongoing market dynamics by focusing on strategies that take advantage of high volatility, such as straddling high beta assets., Probably something that has already moved a lot lately (in the case of a reversal).

Focusing on fundamentals, the US economy seems to be stable after a rough summer patch. This is good news for fourth-quarter earnings and perhaps subsequent earnings.Indeed, Friday, November NFP The result was disappointing, 235,000 against the expected 550,000, but this number will be next month. The household survey was significantly inconsistent with the founding report (In the household survey, 1.14 million jobs were created, compared to 235,000 in the establishment survey).

Elsewhere NS November non-manufacturing ISM It was a big hit report.

According to PMI release, Services sector activity soared to a record high of 69.1, well above the consensus estimate of 65.A recent set of solid data is from US GDP Annual rate 9.7% In the last three months of the year, following a 2.1% increase in the third quarter. A strong recovery towards 2022 positive This is not important in the short term as traders are focusing on newly discovered variants of Omicron and their impact on the global economy.

Personally, I might consider volatility products (such as VIX) until I know more about this stock, but I would like to avoid taking a big direction with risk assets, including the S & P 500.

S & P500 Daily Chart

S & amp; P 500 Weekly Forecast: Omicron Concerns Can Squeeze US Stocks.Resume risky transactions

S & P 500 (SPX) Chart by TradingView

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— Contributor by Diego Colman

Omicron's horror can put pressure on US stocks.Resume risky transactions

Source link Omicron's horror can put pressure on US stocks.Resume risky transactions

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