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S&P 500 Hits a New Record, Europe’s Silver Lining, Crypto Crumbles & The CDC’s Change in Recommendations

S&P 500 hits record then retreats

The S&P started the day moving upward to a new intraday record of 4,807.02, before falling off slightly as markets digested the days news amid light trading volume.  While the impact of Omicron continues to cast a long shadow over the news cycle, indications remain that it may not be as severe as prior variants.  This however is offset by the extreme level of transmission and concern over its effect on the unvaccinated and vulnerable. 

Heading into the close the Dow was up 0.36%, while the NASDAQ was down 0.37% and the S&P 500 was essentially flat with a decline of just 0.04%.

💡 Where did the price action come from?
Some of the price action from yesterday’s move to the upside unwound as drugmakers Pfizer fell 2.6% and Moderna was off by 2.89% in the afternoon session.  Moderna has now lost close to $100 billion from its peak market cap as the price is not down more than 50% from its all-time high in August.

On the flip side airline stocks that had been beaten down yesterday rallied with American Airlines up 1.95%, Delta 2.00%, Southwest 1.44% and United recovered by 1.77%

Europe Faces Omicron, But There’s a Silver Lining

While the UK saw a continuation of record Covid-19 cases with nearly 130,000, France, Greece, Italy, and Portugal all reached new records.  Among these European nations France has seen the greatest increase with almost 180,000 cases today.

The FTSE was down just 0.02%, while the CAC 40 was up 0.57% and the DAX gained 0.81%,

💡 The Silver Lining
Against this backdrop University of Oxford immunologist, John Bell, stated the disease now is not “the same disease we were seeing a year ago,” and that “The horrific scenes that we saw a year ago — intensive care units being full, lots of people dying prematurely — that is now history in my view, and I think we should be reassured that that’s likely to continue,”.

There is hope among some that by Easter 2022 the Covid-19 virus should be much more akin to the Common Cold that the devastating virus the world has been suffering from.   This is due to the effect of previous infections and mass vaccinations providing protection against the current and any future strains. 

Crypto crumbles

After a brief recovery the downward trend of December was back in the Crypto sector.  BTC fell 6.45% to $47,839, ETC was down by 6.49% to $3,819 while most other coins were also under negative pressure.  Some attribute the slide to concerns over the removal of central bank stimulus and the possibility of higher rates, this reduces the appeal of crypto to those who view it as a hedge against inflation.

CDC reduces isolation time to 5 days amid Omicron

While many view the recent change in isolation recommendations from the CDC in a positive light, It is not without controversy among those who feel more restrictions should be in place.  As it stands now Americans who test positive but do not have symptoms can stop isolating after 5 days as long as they continue to wear masks. 

💡 Good news? or effective lobbying?
This comes as the CDC just declared the Omicron variant to be the dominant variant in the U.S. This decision has faced criticism because of airlines lobbying the CDC, As well as a sigh of relief for others since other reports show that Omicron isn’t spreading as quick as it was before.

This change took many by surprise and appears to be more about mitigating the effect of large numbers of asymptomatic workers being unable to do their jobs than a new understanding of how the virus spreads and the period of transmissibility.

“The most difficult thing is the decision to act, the rest is merely tenacity.” 

Amelia Earhart

Richard Ellison, CFA CAIA



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