(Bloomberg) — Stocks rallied and bonds fell as a relative sense of calm returned to global markets, with investors reassessing their worst-case scenarios for the omicron coronavirus strain.
All major groups in the S&P 500 rose, with the gauge rebounding from Friday’s rout and erasing its November losses. The Nasdaq 100 climbed more than 2%, led by gains in giants such as Tesla Inc. and Apple Inc. BioNTech SE, Moderna Inc. and Johnson & Johnson are working to adapt their Covid-19 shots to address the latest variant, with the German partner of Pfizer Inc. noting it could have a new version within 100 days if necessary.
Governments across the globe stepped up restrictions, with New York City “strongly recommending” residents wear masks in all indoor locations regardless of vaccination. Scientists in South Africa noted that omicron appears to spread more easily, but existing vaccines are likely to protect against severe illness. Pershing Square Capital Management founder Bill Ackman said it will be bullish for stocks if symptoms caused by the new strain are mild to moderate.
“Investors are evidently making an assumption today that omicron may not be as bad as had been feared on Friday, and that vaccines may still prove effective,” wrote Fawad Razaqzada, an analyst with ThinkMarkets. “It will take some time — possibly a couple of weeks at least — to understand this variant better. So, what might happen going forward is that we will see elevated levels of volatility.”
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A forward-looking gauge of U.S. home purchases rebounded in October to a 10-month high, signaling steady housing demand. The National Association of Realtors’ index of pending home sales increased 7.5% from a month earlier. The median estimate in a Bloomberg survey of economists called for a 1% advance.
Some other corporate highlights:
Jack Dorsey, the co-founder and chief executive officer of Twitter Inc., is stepping down, ceding the position to the company’s Chief Technology Officer Parag Agrawal.
Hertz Global Holdings Inc. plans to repurchase as much as $2 billion of its common stock, the latest move to realign its finances just months after exiting bankruptcy protection.
Walmart Inc. said Chief Financial Officer Brett Biggs plans to step down by early 2023, ending a run of more than two decades with the retail giant.
Some key events to watch this week:
Federal Reserve Chair Jerome Powell will appear at a Senate Banking Committee hearing alongside Treasury Secretary Janet Yellen on Tuesday. They are set to speak again on the following day at the House Financial Services Committee.
China PMIs, Tuesday
Euro zone CPI, Tuesday
U.S. Conference Board consumer confidence, Tuesday
China Caixin manufacturing PMI, Wednesday
Euro zone manufacturing PMI, Wednesday
U.S. construction spending, ISM Manufacturing, Fed’s Beige Book on Wednesday
OPEC, allies may re-evaluate plans for reviving oil supplies, Thursday
San Francisco Fed’s Mary Daly and Richmond Fed’s Tom Barkin discuss the labor market and inflationary pressures at a virtual event, Thursday
U.S. initial jobless claims, Thursday
U.S. factory orders, unemployment, nonfarm payrolls, U.S. durable goods on Friday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
The S&P 500 rose 1.5% as of 12:25 p.m. New York time
The Nasdaq 100 rose 2.3%
The Dow Jones Industrial Average rose 0.9%
The MSCI World index rose 0.8%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro fell 0.5% to $1.1265
The British pound fell 0.3% to $1.3292
The Japanese yen fell 0.4% to 113.82 per dollar
Bonds
The yield on 10-year Treasuries advanced six basis points to 1.53%
Germany’s 10-year yield advanced two basis points to -0.32%
Britain’s 10-year yield advanced four basis points to 0.86%
Commodities
West Texas Intermediate crude rose 4.6% to $71.28 a barrel
Gold futures fell 0.2% to $1,784.70 an ounce
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