Monday, December 20, 2021
Oil prices plummeting
Omikron sends Wall Street into the red
The uncertainty surrounding the new Corona variant and possible further restrictions is reflected in the buying mood of investors. The impending end of US President Biden’s social and climate protection package is also putting pressure on the courses.
The US stock exchanges suffered significant losses at the beginning of the week. The negative trend from Friday thus continued. The further spreading omicron variant of the coronavirus with continued uncertainty about the severity of the disease and the new restrictions imposed as a result aroused fears about the global economic development among investors. the Dow Jones Index closed 1.2 percent lower at 34,932 points, the S&P 500 yielded 1.1 percent. The technology-heavy one Nasdaq Composite was listed 1.2 percent weaker.
A number of countries have already imposed lockdowns, and more are likely to follow. US President Joe Biden wants to present the new data on the corona pandemic in the USA on Tuesday. An additional negative factor for stocks was that the trillion dollar Social and climate protection package von Biden is on the brink. The Democratic US Senator Joe Manchin says he will not approve the package. Its approval is crucial, however, because the upper house of Congress Democrats cannot allow themselves a single deviator if they want to pass the law.
“We are seeing Omikron spread like wildfire and that is putting the mood down,” said Esty Dwek, chief investment officer at Flowbank. “There are more and more restrictions and cases are so high that even if they are less severe, it could result in more hospitalizations,” which is likely to create new restrictions that will weigh on growth, added added the analyst.
Oil prices are falling significantly
Against this background, oil prices fell significantly. The price for a barrel of the grade Brent decreased by 2.3 percent, WTI yielded 3.1 percent. Worries about a slump in demand in the wake of the further expansion of Omikron and the increased imposition of new restrictions weighed on them.
The bond market, which is seen as a safe haven, was volatile in the mixed situation. Here, the quotations went up first, but they came back as the process progressed. The ten-year yield eventually rose 1.7 basis points to 1.42 percent.
the Dollar index noted moderately easier. The euro gained 0.4 percent to 1.1279 dollars. After initially falling to a new all-time low against the dollar, the Turkish lira eventually shot up again. According to media reports, Turkish President Recep Tayyip Erdogan has announced measures to support the currency and promote savings in lira. The dollar was quoted at 13.52 lira. Previously, the greenback had marched up to over 18 lira. The gold price fell somewhat.
Oracle significantly weaker with acquisition
With the uncertainties surrounding the omicron mutation, the stocks of vaccine manufacturers turned out to be inconsistent. For the share of Moderna after initially significant surcharges it went down by 6.2 percent. According to the group, a third dose of the Covid-19 vaccine has increased immune responses to the omicron coronavirus variant by 37 times compared to two doses in laboratory tests. This could suggest that despite the mutations in the variant, the vaccine might still provide protection. The share of Pfizer meanwhile increased by 2.6 percent, while Biontech 4.2 percent gave in.
the Novavax share lost 7.1 percent in the weak environment. The European Medicines Agency (EMA) has approved the company’s corona vaccine.
Oil stocks came under pressure with falling Brent and WTI prices. Occidental petroleum lost 3.7 percent and Devon Energy 2.4 percent.
Aviation stocks were also volatile. On the one hand, the airlines benefit from lower oil prices, on the other hand, there are concerns about further restrictions on travel. Delta Air Lines listed 0.5 percent lighter. United Airlines on the other hand increased by 0.8 percent.
Oracle lost 5.2 percent. The US software company is strengthening its business with software for hospitals and doctors with a billion-dollar takeover. According to the announcement, Oracle is buying Cerner Corp for 95 US dollars per share, which is valued at around 28.3 billion dollars. For the Cerner share it went up by 0.8 percent.