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Stocks Have a Rough Start of The Week, Energy Markets’ Concerns Over Omicron & UK Prime Minister, Boris Johnson Holds off Additional Measures

Stocks skid to start the week

Faced with the apparent failure of Joe Biden’s “Build Back Better” plan and fears of the Omicron variant, stock markets had a rough start to the week.

Monday trading started in the shadow of Joe Biden’s White House scrambling to manage the fallout from the shock Sunday announcement that conservative Democrat Senator Joe Manchin of West Virginia would not be supporting the cornerstone of Biden’s economic plan.  Further selling pressure came from concerns over the impact of the Omicron variant on what until recently had looked like a return to more normal times.

After falling last week, the major U.S. indices were all deeply negative to start the day before recovering slightly to end the day down 1.23% on the Dow, 1.24% on the NASDAQ and negative 1.14% on the S&P 500.

Energy Markets show concern over Omicron and the re-opening trade

As the impact of Omicron looms like the ghost of Christmas Past the energy markets sold off over concerns that new restrictions may limit demand for energy.  This impact could be seen in a 3.71% drop in the price per barrel of WTI to $68.23 and a decrease of 2.22% to $71.89 for Brent.  Nymex Gasoline futures were off by 0.9% and heating oil also fell by 1.52%.  The lone bright spot in the energy complex was Natural gas which jumped 4.17% to $3.84/MMBtu.

💡 Omicron raging through the world
Official U.S. Pandemic Advisor, Dr. Fauci stated that the next few weeks to months would be tough, specially with the incoming winter. He also warned against too much optimism over Omicron’s severity

BoJo holds off on additional measures

In the UK embattled Prime Minister Boris Johnson said he would not hesitate to act if needed but held off on announcing any additional restrictions to mitigate the concurrent waves of Delta and Omicron Covid-19 infections in the UK. Johnson emerged from an intense 2 hour cabinet meeting to deliver the news that despite rising hospitalizations and the largest running infection totals since the pandemic began to say that there for be no further measures for the moment.

Johnson’s non-announcement has left the UK in a state of uncertainty as there is a clear increase in the prevalence of Covid-19 and the British leader has left the door open to additional restrictions at any point in time.  Johnson said

💡 More on the matter
After a two-hour cabinet meeting, Johnson emerged to tell reporters that his government was watching the steep rise in omicron cases “hour by hour,” but was holding fast, even as Britain’s closest neighbors turned the screw. Ireland has enacted an 8 p.m. pub curfew; France closed nightclubs; Germany barred the unvaccinated from nonessential stores; and the Netherlands went into full lockdown.

We will not exclude going further if we have to do things to protect the public, and “there are still some things that we need to be clearer about before we decide to go further”.

The FTSE was down 0.99% to 7,198.03 on the day while other European markets fell due to the effects of Omicron on the Continent with the DAX down 1.88% and the CAC 40 down 0.82%.

“The goal isn’t more money.  The goal is living life on your terms.”

– Will Rogers

Eliman Dambell

Senior Market Analyst