Back to the guessing game

11/29/2021 | 11:28am

Wall Street is bouncing back after a movement on panic on Friday due to the appearance of a new variant of the coronavirus, about which little is known.

From the Greek alphabet, we know mainly the letters frequently used in the media, finance, astronomy, mathematics or proverbs. Alpha, Delta, Pi or Omega. Since this weekend, the world discovers Omicron, the small Greek "o", as opposed to Omega, the big "o" (as their respective names indicate). Omicron is the name given by the WHO to the last variant of the coronavirus.

The losses of the three major US indices stood between 2 and 2.5%. Health care and home shopping stocks popped like champagne corks, while airlines and energy stocks sank like a stone. The violence of the reactions shows that investors were taken by surprise by the emergence of a new variant potentially more dangerous than its predecessors. Although, to be honest, it is not clear where we stand with Omicron as Delta regains strength. Southern Africa is paying the price, since the first cases have been identified there, while Israel and Japan have closed or will close their borders to tourists.

The WHO issued a statement yesterday to explain that it is not yet known whether Omicron is more transmissible or whether it causes a more serious disease than infections with other variants. It will take some time to determine this. At this point, the first infections have been reported in university students, who are young and generally have mild forms. Laboratories such as Moderna, AstraZeneca or Pfizer have worked to reassure over the weekend by indicating that they would be able to quickly adapt their vaccines to the new variant if necessary.

These announcements have allowed the leading indicators of Western markets to point towards a rebound this morning, even if Asia continues to brood. But the VIX volatility index is back to levels not seen since early February. This means that nervousness is high and trends can change quickly, in this case based on the Omicron announcements. On the macroeconomic agenda for the week, the most anticipated statistic is the US November employment data, released on Friday. Until then, several central bankers will be out for public speeches, starting with Jerome Powell of the Fed this evening.


Economic highlights of the day:

The preliminary estimate of German inflation and the October housing data in the US.

The dollar is up 0.25% to EUR 0.8878. The ounce of gold is trading at USD 1787. Oil is down to USD 70.18 per barrel of WTI and USD 74.37 per barrel of Brent after a sharp rebound. Net decline on bond yields, with a 10-year rate of 1.53% for the T-Bond (-10 points) and -0.34% for the Bund (-9 points). Bitcoin is trading at USD 57,200.


On markets:

* Walmart, Amazon, Target - U.S. consumers spent consumers had spent $6.6 billion (€5.84 billion) by Friday (€5.84 billion) by 9 p.m. Easter Time on Friday for Black Friday, according to Black Friday, according to the Adobe Digital Economy Index Economy Index, which predicts between $8.8 billion and $9.2 billion of spending for this day of promotions. The U.S. retailers also expect to make up to $11.3 billion in sales for Cyber Monday, the day of online Monday, the day of online promotions that follows the Black Friday weekend.

* Moderna - The U.S. laboratory announced Friday that it is working on Friday that it is working on vaccine booster doses adapted to the Omicron variant of the coronavirus detected in South Africa. 

* Novavax also announced Friday that it has begun development of a new version of its COVID-19 vaccine that targets the Omicron variant and that test doses would be would be available in the coming weeks.

 * Thermo Fischer Scientific announced Monday that its diagnostic tests for COVID-19 can accurately detect the new Omicron accurately detect the new Omicron variant of the coronavirus.

* Merck is down 1.6 percent to $77.87 in pre-market trading before the opening of Wall Street after the downgrading of the recommendation of Citi on the value, the intermediary judged the likelihood of a discontinuation of the experimental treatment islatravir in the next three months.

* Fennec Pharmaceuticals plunged 29.6% in pre-market trading as the company as the company said it expects the Food and Drug Administration to reject by the Food and Drug Administration, the health authority in the of its application for approval of its treatment for hearing loss against chemotherapy-induced hearing loss in children.

* Advanced Micro Devices, Tesla shares are up after Tesla's decision on Friday to equip its Model Y vehicles in China with the company's chips.

 * Netflix, Alphabet, Meta - U.S. tech giants must shoulder some of the costs of developing telecommunications networks in Europe because they use them so extensively, said Monday the heads of thirteen major European telecom groups. 

* Twitter - Roskomnadzor, the Russian communications authority, announced on Monday that the American social network would continue to idle in Russia on mobile devices until it has removed all content deemed illegal.

 * Visa has referred to the U.S. administration the campaign in India by RuPay, a payment service supported by Indian Prime Minister Narendra Modi, documents seen by Reuters show.

 * Amazon has asked the Indian competition authority to cancel authority to rescind its green light to buy the assets of Future Retail for $3.4 billion by Reliance, saying the deal was "illegally obtained", shows a letter seen by Reuters.


Analyst recommendations:

  • Allbirds: KeyBanc starts coverage at overweight with $28 price target
  • Asos: Oddo BHF starts tracking at Neutral with a target of GBp 3,000.
  • Burberry: Bernstein remains Market Perform with a reduced target of GBp 2,261 to 1,972.
  • CyrusOne: Jefferies downgrades to hold from buy, adjusts price target to $90.50 from $88
  • Greif: Wells Fargo Securities cut the recommendation on Greif Inc. Class A to equal-weight from overweight. PT up 11% to $75
  • Hargreaves Lansdown: Morgan Stanley upgrades from Overweight to Underweight.
  • Homeserve: HSBC upgrades from light to hold with a target of GBp 980.
  • Merck & Co.: Citigroup cuts to neutral from buy, price target to $85 from $105
  • Mirion Technologies: Goldman Sachs starts coverage at Buy With $14 Price Target
  • NerdWallet: KeyBanc starts at Overweight with $35 price target
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