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Dr. Fauci’s Encouraging Comments on Omicron, Investors Start the Week Pulling Back from Crypto & FTSE 100 Has Its Best Session in 4 Months

U.S. indices rally, as Fauci “encouraged” by Omicron data

Indices in the United States started this week strong, as traders reacted to encouraging comments from Dr. Fauci regarding Omicron.

Speaking over the weekend, the Chief Medical Advisor stated that, “Though it’s too early to really make any definitive statements about it, thus far it does not look like there’s a great degree of severity to it”.

💡 Are we in the clear?
Omicron made the headlines almost every day this week as investors had flashbacks of earlier Delta variant reports. However, it seems as though Omicron, though highly mutated may not be as lethal. Further research will continue to confirm or deny this claim.

Fauci went on to add that, “Thus far, the signals are a bit encouraging. But we have really got to be careful before we make any determinations that it is less severe, or it really doesn’t cause any severe illness, comparable to Delta”.

Markets rallied on the news, led by the blue-chip Dow Jones which was up 2.16% as of writing.

Both the S&P 500 and NASDAQ were also trading above 1% higher.

Bitcoin prices consolidated at 2-month low

Bitcoin prices were down by as much as 20% over the weekend, as investors pulled back from cryptocurrencies, amid concerns over the Omicron variant.

BTCUSD fell to as low as $42,000 during this weekend’s trading, a level it hasn’t hit since October 5th.

Markets have since stabilized, with prices now at the long-term resistance of $49,000, with many still expecting further declines.

Get a glimpse of where investors are looking by watching Mike V’s Monday Market Talk

The drop began after a weaker than expected Nonfarm payrolls number on Friday, which coincided with raising fears over Omicron.

As such, investors moved away from Crypto and into indices, which is one of the reasons for today’s stock market rally.

However, many long-term Crypto investors have viewed this recent selloff as an opportunity to “buy the dip”, which has helped to keep prices from further declines.

FTSE 100 climbs by most in 4-months

In the United Kingdom, London’s FTSE 100 had its best trading session in the last 4-months as inflation concerns heightened.

Speaking a week before the Bank of England’s monetary policy meeting, deputy Governor Ben Broadbent expected inflation to double the Bank’s 2% target.

Broadbent stated that, “The aggregate rate of inflation is likely to rise further over the next few months and the chances are that it will comfortably exceed 5% when the Ofgem (regulator) cap on retail energy prices is next adjusted in April”.

💡 More on the story
Royal Dutch Shell and BP we’re the biggest winners that contributed to today’s push as crude oil prices strengthened presumably from the positive reports on Omicron lethality.

Many viewed this as potential foresight into the Bank’s rate decision next week, with some expecting a hike, if the MPC could see past the current threat of Omicron.

The FTSE 100 closed 1.54% higher on Monday.

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– Scott Redler

Eliman Dambell

Senior Market Analyst

 

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