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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

Covid positivity remains sky high in South Africa

south africa covid data Dec 6

  • 23 Nov: 605
  • 24 Nov: 1018
  • 25 Nov : 1950
  • 26 Nov : 2173
  • 27 Nov : 2629
  • 28 Nov : 2308
  • 29 Nov : 1909
  • 30 Nov: 3143
  • 1 Dec: 6168
  • 2 Dec: 8280
  • 3 Dec: 11553
  • 4 Dec: 11,607
  • 5 Dec: 7929
  • 6 Dec: 4488

On the face of it, that looks like great news but the number of tests is down by two-thirds in the past two days. That’s partially a weekend effect. Just 24,159 tests were processed and positivity was 26.4%, which is the highest during this outbreak. It suggests that most infections are being missed.

The good news is that cases don’t appear to be accelerating faster, even after adjusting for testing. Cases are up 135% w/w with about the same number of tests but that’s an improvement over recent days.

That’s somewhat of a sign that it’s not quite as infectious as feared. Models tend to oversample around outbreak events and in countries where there have been superspreader events.

In terms of severity, there is an increase in re-infection rates, meaning that past infection isn’t as effective. So far infections in vaccinated individuals have been mild.

“Unfortunately, we’re seeing a more than doubling of hospital admissions each day,” said Ian Sanne, an infectious diseases specialist who serves on South Africa’s COVID-19 presidential advisory committee.

Meanwhile, the list of countries where they’ve detected the variant is now too long to name. You can assume that it’s nearly everywhere or will be soon.

What’s encouraging is that markets have stabilized. Oil and copper were both higher today alongside US stock markets. The market has shown a remarkable ability to look beyond covid and that’s likely to be the case once again, baring a turn for the worse in hospitalization.

Major indices move higher. Dow erases losses from last week/Nasdaq higher but lags

The major US stock indices are closing the session with varied gains. The major three indices was led by the Dow. The Russell 2000 which has been beaten down the most from all time highs, had the best gains for the day. The Nasdaq index which is 6% off the all time high, lagged but still rose 0.93% on the day.

All the S&P sectors rose on the day with consumer staples, industrials and communication services leading the way.

The final numbers are showing:

  • Dow industrial average rose 646.95 points or 1.87% at 35227.02
  • S&P index rose 53.24 points or 1.17% at 4591.68
  • NASDAQ index rose 139.69 points or 0.93% that 15225.16
  • Russell 2000 index rose 44.17 points or 2.05% that 2203.47

Some of the bigger winners today included:

  • Rivian Automotive, +11.57%
  • AliBaba, +10.44%
  • Airbnb +8.46%
  • United Airlines plus a .32%
  • American Airlines +7.8%
  • Uber +7.36%
  • lyft +6.28%
  • Delta +6.02%
  • Twitter +5.66%

Losers today included:

  • Moderne up -13.49%
  • Novavax, -11.6%
  • Pfizer -5.12%
  • Chewy, -5.02%
  • AMD, -3.44%
  • Game Stop, -2.98%
  • Nvidia -2.14%
  • Crowdstrike, -1.19%
  • snowflake -1.05%
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