Pre-market stocks: Investors want answers from Omicron. They won’t have them yet

“We still have to go through a few weeks of uncertainty,” Moderna chief medical officer Dr Paul Burton told CNN’s Paula Reid on Sunday.

The string of unknowns spooked financial markets on Friday, when the Dow Jones fell 905 points, or 2.5%, recording its worst day in more than a year. Oil prices plunged more than 10%.

The CNN Business Fear & Greed Index, which tracks market sentiment, is firmly back in “fear” territory.

There are five questions, we believe, that aggressive investors now want answered. The first three are exactly what public health officials are striving to determine.

  • Is the Omicron variant more transmissible?
  • Does it increase the risk of serious illness?
  • Does it reduce the effectiveness of vaccines?

“The question is whether there is minimal impact on the effectiveness of the vaccine, or is there a large impact? I think we will probably get some preliminary data in the next few days,” said the Dr Ashish Jha, Dean of Brown University School of Public. Health, CNN said.

Two additional questions relate to the potential economic impact of the variant.

  • How will governments react?
  • Will consumers adjust their behavior?

“I started this year by warning that the evolution of the pandemic was the main risk facing the global economy,” Neil Shearing, group chief economist at Capital Economics, said Monday in a research note. “The Omicron news, followed by swift action by governments to close borders to limit its spread, and the strongly negative market response to these events, is a reminder of this acute economic vulnerability.”

A number of countries have closed their borders to visitors from southern Africa. The European Union, Australia, United States, Canada, Rwanda and many others have banned travelers from countries like South Africa, Botswana, Zimbabwe and Namibia. Japan has completely closed its borders to non-resident nationals.

It is not clear, however, whether stricter rules could be put in place for a wider range of countries, hampering larger-scale international travel.

If infections start to rise, countries could also start to reimpose restrictions on public life. Curfews for restaurants, work-from-home orders and other mandates – which have already reappeared in Europe – would hurt economic recovery.

On the radar: Consumers could also make their own decisions about staying at home if they are worried about the variant developing.

Investment advisers tell their clients to avoid raising the alarm and waiting for more information, even if they admit it is an important moment.

“We are not recommending panic selling or repositioning,” said Christopher Harvey, senior equity analyst at Wells Fargo. “Conversely, it’s hard to say, ‘Nothing to see here… like you were.’ While not really exciting advice, we believe less is more until we can better assess the risks. “

In short: The coming days and weeks could be hectic, as investors react to developments on one of the fronts outlined above. The VIX, which measures market volatility, is down 14% this morning. It is still at its highest level since September, as Wall Street enters a tense waiting period.

Buyers are returning to stores for the holiday season

Black Friday no longer has the importance it once had for increasingly comfortable American shoppers with online deals.

But customers still spent more money on clothes, electronics and other items this Black Friday as they chose to visit stores in person again, reports my CNN Business colleague Nathaniel Meyersohn.

Black Friday sales are up nearly 30% from a year ago, according to estimates until 3 p.m. ET Friday from Mastercard, which tracks payment data in stores and online. In-store sales jumped 43%.

“[This] is a testament to the strength of the consumer, ”said Steve Sadove, Senior Advisor at Mastercard. “We anticipate a positive holiday period well beyond Black Friday. “

Clothing sales led the growth, climbing 86% from Black Friday a year ago, when shoppers mostly stayed home and didn’t have much reason to spruce up their wardrobes.

Getting Ready: It’s a great way to kick off the all-important holiday shopping season. Retail sales in November and December are expected to grow between 8.5% and 10.5% this year from 2020, reaching a record high of $ 859 billion, according to the National Retail Federation.

But there is a wrinkle. According to data from Adobe Analytics, online spending on Black Friday was $ 8.9 billion, down from 2020.

“For the very first time, Black Friday saw a reversal of the growth trend of previous years,” said analyst Vivek Pandya. “Buyers are strategic in their gift purchases, buy much earlier in the season, and are flexible about when to shop to ensure they get the best deals.”

Check out this space: Eyes are now on Cyber ​​Monday. Adobe predicts it will be the biggest online shopping day of the year, with consumers spending between $ 10.2 billion and $ 11.3 billion. Will it meet expectations?

Economists are now closely monitoring the effects of the Omicron variant on consumer sentiment. It had already deteriorated due to inflation, although clients continued to take out their wallets.

Canada draws from its strategic reserves … of maple syrup

Last week, countries around the world announced that they would exploit their strategic oil reserves in an attempt to lower gasoline prices.

Not to be outdone, Canada also draws on its strategic reserves. But not for the crude.

Quebec Maple Syrup Producers free up about 50 million pounds of their strategic maple syrup inventory, nearly half of the trading group’s holdings, reports my CNN Business colleague Ramishah Maruf.

Safeguard: The government-backed organization, which is often referred to as the maple syrup OPEC, uses its reserves to control the prices and supply of syrup. In 2020, Quebec produced 73% of the world’s maple syrup.

The strategic reserve was created to keep syrup in stock during bad harvest seasons or when demand increases. While 2021 was an average year for Quebec production, sales increased by 21% compared to last year, putting the offer to the test.

“The pandemic has helped in our case because we are seeing people cooking more at home and using more local produce,” spokeswoman Hélène Normandin said in an interview with Bloomberg.
Overview: This trend has been repeated for a number of agricultural products in recent months. When weather conditions reduce yield, the situation is even worse. Extreme weather conditions threatened the coffee supply, for example, pushing futures contracts to their highest level in a decade last week.


Pending home sales in the US for October arrive at 10 a.m. ET.

Coming tomorrow: Did US consumer spending remain strong in November despite inflation fears?

More Stories
Column: China Reduces Crude Inventories, Halts Oil Demand Growth