Risk rebounds as Pfizer reveals a third dose of their vaccine neutralises omicron variant

European stocks are bouncing back to positive territory while US futures have soared on the Pfizer news here.

S&P 500 futures had earlier pared gains of around 0.4% to flat levels but are now up 0.5% on the day. Meanwhile, Treasury yields looked heavy after news of further imminent UK virus measures but have bounced back strongly.

10-year yields were down to 1.43% but have pared that drop to 1.47% now. In the meantime, 2-year yields are keeping their focus well on the Fed and rate hikes in a climb to 0.70%:

Limited data availability making it tough to assess omicron severity, says WHO

  • WHO says it needs more data to assess omicron mutations and its impact on vaccine efficacy

Sort of stating the obvious as this is the question that the world is waiting on at the moment. Vaccine makers are only likely to share some of their own findings in the next week or two. So, expect the WHO to trail behind that as per their standard operating procedure during the pandemic.

Japan Q3 GDP (second reading) -0.9% q/q vs -0.8% expected

Japan GDP chart Q3 2021

Japan’s economy contracted in Q3 on covid disruptions in a sign that it will be long struggle to ever raise interest rates.

  • GDP annualized -3.6% vs -3.1% expected (first estimate was -3.0%)
  • Private consumption -1.3% vs -1.1% prelim
  • External demand 0.0% vs +0.1% prelim
  • Inflation deflator vs -1.1% prelim
  • Capex -2.3% vs -3.9% expected

This isn’t a great slate of data but at least there were some better capex numbers. Indications are that private consumption rebounded in October/November but omicron will add a fresh reason to stay home.

US stocks close solidly higher on the day

The major US stock indices are closing solidly higher with the NASDAQ index leading the way.

  • Nasdaq and S&P have their best day since March
  • All sectors of the S&P close higher for the 2nd consecutive day.
  • S&P closes 1.16% from its all-time highs
  • Nasdaq closes 3.24% from its all-time highs
  • Dow close at 2.3% from its all-time highs

The final numbers are showing:

  • Dow industrial average rose 492.40 points or 1.4% at 35719.44
  • S&P index rose 95.08 points or 2.07% at 4686.76
  • NASDAQ index rose 461.77 points or 3.03% at 15686.93

The Russell 2000 also recovered some of its losses seen recently with a gain of 50.30 points or 2.28% at 2253.78. The index is still over 8% from its all-time high reached on November 8.

The NASDAQ index is closing between its 100 hour moving average at 15677.69 and its 200 hour moving average at 15695.31. Those moving averages will be the barometer is going forward for bulls and the bears. Move above tomorrow, and the bias tilt more to the upside. Move below tomorrow and the bias tilt more to the downside.

Pres. Biden: Voiced deep concerns over Russia’s action in Ukraine

  • Deep concerns over Russia’s actions in Ukraine in a video meeting with Russia’s Putin
  • Told Putin US, allies would respond with strong economic and other measures in the event of military escalation
  • Reiterated his support for Ukraine’s sovereignty and territorial integrity and called for de-escalation and the return to diplomacy in Putin meeting
  • Discussed US – Russia dialogue on strategic stability, ransomware, regional issues such as Iran
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