Markets mixed, COVID-19 threatens US hospitals and chip supply

Markets were mixed on Thursday.

The S&P 500 fell 0.3 percent but the STOXX Europe 600 rose 0.2 percent.

Earlier in Asia, the Nikkei 225 fell 0.4 percent but the Shanghai Composite rose 0.6 percent.

The surge in COVID-19 infections continue around the world, with some hospitals in the US reporting packed emergency rooms as the country hit a new pandemic high of 300,886 average new daily cases over the week to Wednesday.

“What we're experiencing right now is an absolute overwhelming of the emergency departments” in Washington, said Dr James Phillips, chief of disaster medicine at George Washington University Hospital.

Meanwhile, an outbreak of COVID-19 infections in the Chinese city of Xi'an could aggravate a global chip shortage. Samsung and Micron reported on Wednesday that they have had to adjust operations in the city after authorities enacted a stringent lockdown.

Markets mixed amid inflation fears and COVID-19 surge

Markets were mixed on Wednesday.

The S&P 500 edged up 0.1 percent to close at another record high. However, the STOXX Europe 600 dipped 0.1 percent and the Nikkei 225 fell 0.6 percent.

“The seasonals favor further gains in the market,” said Wells Fargo Investment Institute’s Gary Schlossberg.

A CNBC survey showed that investors fear inflation most in 2022.

Meanwhile, COVID-19 also remained a concern as the US confirmed more than 4.5 million cases this month.

Dr Anthony Fauci said on Wednesday that the latest wave of the pandemic may hit its peak in the US by the end of January.

However, the World Health Organization warned on Wednesday that new coronavirus variants could emerge during the pandemic that render the current vaccines useless.

Omicron surge could be most devastating one yet

Markets rose on Monday, with the S&P 500 gaining 1.4 percent to close at a record high.

Markets rose even as many countries are implementing new restrictions to stem the rise in Omicron infections.

“We do not expect Omicron to impact the growth outlook in any significant way, but rather it is likely to accelerate the end of the pandemic,” said JPMorgan’s Dubravko Lakos-Bujas in a note.

Still, the virus could cause a lot of problems before the pandemic comes to an end.

A report from researchers at the COVID-19 Modeling Consortium at the University of Texas, Austin showed that the Omicron surge could be the most devastating one yet in the US.

“Across all scenarios we expect to see cases that are at least as high as the Delta surge in September 2021, but that would be the minimum,” said Lauren Ancel Meyers, director of the UT consortium. “At a maximum we could see a surge in cases that is even higher than our January 2021 surge, which would make it the biggest national surge seen to date.”

Investors take “sunnier view” despite rise in Omicron cases

The S&P 500 rose 2.3 percent last week as investors turned optimistic towards the year end.

“I think all the things we’ve been concerned about for the month of December to a certain extent, are in the rearview mirror,” said Art Hogan, chief market strategist at National Securities.

“Whereas the market was focusing on everything that could go wrong since Thanksgiving, people are now just taking a sunnier view,” said Paul Hickey, co-founder of Bespoke Investment Group.

Studies showing that the Omicron variant may be milder than other variants of the coronavirus has fed the optimism, although US infectious disease expert Dr Anthony Fauci warned against complacency.

Fauci told ABC on Sunday that infections “go up and up” every day and “we don't want to get complacent” because “when you have such a high volume of new infections, it might override a real diminution in severity”.

S&P 500 hits record high, hope for Santa rally

Markets rose on Thursday.

The S&P 500 rose 0.6 percent to a record high, the STOXX Europe 600 rose 1.0 percent and the Nikkei 225 rose 0.8 percent.

Jim Paulsen, Leuthold Group’s chief investment strategist, said that “dip-buyers not wanting to miss out on a Santa Rally have taken charge”.

Investors were also encouraged by news that the Omicron variant of the COVID-19 virus is less likely to result in hospitalisation than earlier strains.

Investors “increasingly bullish”, COVID pandemic end seen

Markets rose on Wednesday, with the S&P 500 gaining 1 percent.

Chris Hussey, a managing director at Goldman Sachs, said that “markets appear to finally be calming down” as the “triple headwinds of rising virus cases, a more hawkish Fed, and elusive fiscal stimulus are absorbed into risk-asset prices”.

“The news flow is negative in the near-term as the Omicron wave causes economic and corporate earnings dislocations, but investors are increasingly bullish looking out beyond the next few weeks,” said Adam Crisafulli, founder of Vital Knowledge.

Indeed, some experts see the fast-spreading Omicron variant of the COVID-19 virus actually hastening the pandemic's end by building natural immunity among the population that could help protect against Covid’s next variant of concern.

“As all the public health folks have been saying, it’s going to rip right through the population,” said Dr David Ho, a world-renowned virologist and Columbia University professor. “Sometimes a rapid-fire could burn through very quickly but then put itself out.”

Markets rise, Omicron to push health systems “to the brink”

Markets rose on Tuesday.

The S&P 500 jumped 1.8 percent, the STOXX Europe 600 rose 1.4 percent and the Nikkei 225 surged 2.1 percent.

“The market seems to be reacting to a short-term oversold position,” said Timothy Lesko, principal at Granite Investment Advisors. “If omicron-induced illness remains mild, which seems to be of some debate, we could see a rally.”

Mark Hackett, Nationwide’s chief of investment research, said that “increased volatility and thinner trading volumes could cause the market to overreact, which could be a buying opportunity in the run-up to Christmas”.

Meanwhile, though, the Omicron variant of the COVID-19 virus continues to be a threat to the world.

Data published on Monday by the Centers for Disease Control and Prevention show that the Omicron variant is now the dominant COVID-19 strain in the US, representing 73 percent of sequenced cases.

In Europe, Hans Kluge, the World Health Organization's top official in the continent, warned that Omicron will dominate in more countries of the region, “pushing already stretched health systems further to the brink”.

And while leaders have pushed the people in their countries to get vaccinated against COVID-19, a report in the New York Times said that research so far suggests that the vaccines used in most of the world offer almost no defense against becoming infected by the Omicron variant.

“[O]nly the Pfizer and Moderna shots, when reinforced by a booster, appear to have initial success at stopping infections, and these vaccines are unavailable in most of the world,” the report said.

“The other shots — including those from AstraZeneca, Johnson & Johnson and vaccines manufactured in China and Russia — do little to nothing to stop the spread of Omicron, early research shows.”

Omicron restrictions loom

The S&P 500 fell 1.9 percent last week.

Still, Paul R La Monica at CNN noted that the “S&P 500 is up 23% this year and is just a little more than 1% from its record high”.

This is despite the rise of the Omicron variant of COVID-19 around the globe raising the possibility that countries may have to implement new lockdowns, a possibility that, he wrote, “might not be priced into the broader stock market just yet”.

Indeed, the Netherlands entered a strict new lockdown Sunday in response to fears over the spread of Omicron.

Meanwhile, in the UK, Health Secretary Sajid Javid said on Sunday that he could not rule out restrictions before Christmas while London Mayor Sadiq Khan said that new COVID-19 restrictions were “inevitable”.

In the US, businesses are already reacting to the spread of Omicron.

“Some Broadway shows in New York City have been canceled,” wrote La Monica. “And companies ranging from Apple and Ford to ridesharing firm Lyft and investment bank Jefferies have recently announced plans to delay workers' return to the office. More businesses are likely to follow suit.”

Omicron "a major, imminent threat to public health"

Markets fell on Friday.

The S&P 500 fell 1.0 percent, the STOXX Europe 600 fell 0.6 percent and the Nikkei 225 plunged 1.8 percent.

Worries over the Omicron variant continued to weigh on markets.

A study by Imperial College London showed that the risk of reinfection with the Omicron variant is more than five times higher and it has shown no sign of being milder than Delta.

The study also showed that the effectiveness of vaccines is reduced against the Omicron variant compared to Delta, suggesting that the "level of immune evasion means that Omicron poses a major, imminent threat to public health".

BoE hikes rates, ECB cuts bond purchases

Markets were mixed on Thursday.

The S&P 500 fell 0.9 percent but the STOXX Europe 600 jumped 1.2 percent.

Thursday’s decline in US stocks followed gains in the previous session after the Federal Reserve announced a more aggressive plan to wind down its asset purchases and hike rates in 2022.

However, in Europe, stocks gained despite the Bank of England on Thursday hiking interest rates for the first time since the onset of the pandemic and the European Central Bank announcing a cut in its bond purchases.

Stocks fall, Fed action in focus

Stocks fell on Tuesday, with the S&P 500 falling 0.7 percent.

“The large cap names are now starting to fall by the wayside, which is exactly what happened in 2018, the last time we had sort of that rolling correction idea,” said Morgan Stanley chief investment officer Mike Wilson.

The Federal Reserve kicked off its two-day meeting on Tuesday. With US producer prices rising 9.6 percent in November from the previous year, the largest yearly increase on record, investors are concerned that the Fed could remove monetary stimulus at an accelerated pace.

“If Fed Chair Powell emphasizes that the FOMC remains flexible, the ‘Fed put’ should remain in place. However, if his tone is overly hawkish, it could turn into a disaster like December 2018,” said Wolfe Research strategist Chris Senyek.

Meanwhile, news on the Omicron variant of the COVID-19 virus remained worrisome.

“Omicron is spreading at a rate we have not seen with any previous variant,” said WHO Director-General Tedros Adhanom Ghebreyesus on Tuesday. “Even if omicron does cause less severe disease, the sheer number of cases could once again overwhelm unprepared health systems.”

Stocks down on imminent Fed tightening, “tidal wave” of Omicron infections

The S&P 500 fell 0.9 percent on Monday.

“With the first Fed tightening imminently pending, investors are dumping anything but risk-off assets,” said Jim Paulsen, chief investment strategist for Leuthold Group.

Also worrying investors is the Omicron variant of the COVID-19 virus.

“Given the current available data, it is likely that Omicron will outpace the Delta variant where community transmission occurs,” the World Health Organization said last week.

UK Health Secretary Sajid Javic said on Monday that “we're facing a tidal wave of infection”.

And vaccines may not work as well against the new variant.

“Our findings show that vaccine effectiveness against symptomatic disease with the Omicron variant is significantly lower than with the Delta variant,” researchers at Oxford University wrote in a study released on Monday.

S&P 500 falls amid Omicron and inflation concerns

The S&P 500 fell 0.7 percent on Thursday after three consecutive days of gains.

Dr Scott Gottlieb told CNBC on Tuesday that the Omicron variant may extend the pandemic phase of COVID-19.

Gottlieb said that the US is still likely to “go from a pandemic into a more endemic phase” but later.

Greg Bassuk, chief executive officer of AXS Investments, said that “Covid is still the investor narrative” but “a lot of eyes are shifting to economic data to gauge where the Fed might be going in terms of potentially faster and greater extent of tapering”.

“While growth and labor markets have provided reasons to be optimistic about the economy, inflation is also running hot and sits at a 30-year high,” UBS wrote in a recent note to clients.

Trade credit insurer Euler Hermes said in a report published Thursday that global supply chain disruptions may continue until the second half of next year.

Anthony Scaramucci, founder and managing partner of SkyBridge Capital, said that inflation is “a transitory aftermath of the crisis” and will abate once supply chain constraints ease.

Omicron to “overwhelm” world in 3-6 months

Omicron is set to take over Delta as the dominant COVID-19 virus strain in the coming months.

Dr Leong Hoe Nam of Mount Elizabeth Novena Hospital in Singapore told CNBC that “Omicron will dominate and overwhelm the whole world in three to six months”.

Leong said that with a surge in cases, health-care systems could be overwhelmed even if only 1 or 2 percent of the cases end up in hospital.

On hopes for a vaccine targetted at the variant, Leong said “it is not practical”.

“We won’t be able to rush out the vaccines in time and by the time the vaccines come, practically everyone will be infected [with] Omicron given this high infectious and transmissibility,” he said.

However, Dr Syra Madad, a fellow at the Belfer Center for Science and International Affairs, said that “our current vaccines will hold up to a certain extent, with this new variant” and, with boosters, should still provide a “good level of protection”.

WHO: COVID-19 vaccination not enough

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.2 percent and the STOXX Europe 600 rose 0.1 percent.

Markets were able to rise despite the continuing threat from COVID-19.

Europe is now once again the epicentre of the pandemic, with Slovakia, the Czech Republic, the Netherlands and Hungary all reporting new highs in daily infections on Wednesday.

The European Centre for Disease Prevention and Control has recommended vaccine boosters for all adults.

However, the World Health Organization's director-general Tedros Adhanom Ghebreyesus said on Wednesday: "We're concerned about the false sense of security that vaccines have ended the pandemic and people who are vaccinated do not need to take any other precautions."

Markets mixed, European stocks tumble

Markets were mixed on Tuesday.

In the US, the S&P 500 rose 0.2 percent but the Nasdaq Composite fell 0.5 percent.

Elsewhere, the Shanghai Composite rose 0.2 percent but the STOXX Europe 600 fell 1.3 percent.

Angelo Kourkafas, investment strategist at Edward Jones, noted “a little pressure on tech stocks as long-term government bond yields have rallied for the second day now”.

Aptus Capital Advisors portfolio manager John Luke Tyner said in a note: “With a Powell-led Fed, we expect the speed of the QE taper to follow the data, likely speeding up if inflation prints continue at the pace of the October print with interest rate hikes to shortly follow the taper (June at current pace).”

However, for the global supply chain problems that have been blamed for driving up inflation, Esben Poulsson, who chairs the International Chamber of Shipping, told CNBC that “overall, I think the worst is over”.

Markets mixed, inflation and COVID-19 risks seen

Markets were mixed on Monday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 dipped 0.1 percent but the Nikkei 225 rose 0.1 percent.

US President Joe Biden announced on Monday he would nominate Chairman Jerome Powell to continue to lead the Federal Reserve.

UBS director of floor operations Art Cashin said “the market is happy with no disruption” while David Waddell, chief investment strategist at Waddell and Associates, said that “the drivers on today’s action is more technical, short-week, rotational, dollar strength and interest rates up a little bit”.

Wharton finance professor Jeremy Siegel meanwhile warned that inflation poses a risk for the market.

“If the Fed suddenly gets tougher, I’m not sure that the market is going to be ready for a U-turn that Jerome Powell may take if we have one more bad inflation report,” said Siegel.

In Europe, Germany’s acting Chancellor Angela Merkel said that the country was seeing a spike in COVID-19 infections and that stronger action needed to be taken to stop its spread.

The Bundesbank said in its monthly report that risks from an intensified pandemic would exist throughout the winter half-year but added: “As things stand at present, the macroeconomic effects are likely to be less severe than in previous pandemic waves.”

Europe, US face COVID-19 risks again

Dr Hans Kluge, WHO Regional Director for Europe, told the BBC that the continent could see 500,000 more deaths from COVID-19 by March unless urgent action is taken.

Well, good luck on imposing more restrictions.

After a series of new restrictions imposed by European governments over the last few days, protests are erupting in several places, including Brussels, Vienna, Rome and Amsterdam.

Meanwhile, COVID-19 cases in the US are also on the rise, with the daily average of new cases having risen 29 percent in the last 14 days and the US government’s chief medical adviser Dr Anthony Fauci warning on Sunday that time was running short to prevent a “dangerous” new surge of infections from overwhelming the upcoming holiday season.

Markets mixed, Europe announces new COVID-19 restrictions

Markets were mixed on Friday.

The S&P 500 fell 0.1 percent and the STOXX Europe 600 fell 0.3 percent but the Nikkei 225 rose 0.5 percent.

Markets in Europe and the US were shaken after Germany on Thursday announced more restrictions for unvaccinated people amid a renewed surge in COVID-19 cases and Austria announced on Friday that it will re-enter a full national lockdown.

However, some analysts are confident that the latest developments will not have much impact.

“We’ve been through wave after wave of Covid and different variations of it, and we’ve never really seen a big market sell-off because of it,” said Ross Mayfield, investment strategy analyst at Baird.

In the meantime, Mike Loewengart, managing director of investment strategy at E-Trade Financial, noted that “there are some clear signs that consumers are resilient and corporate balance sheets are strong despite pricing pressures”.

Markets mixed, looking “like bubble in late ’90s”

Markets were mixed on Thursday.

The S&P 500 rose 0.3 percent but the STOXX Europe 600 fell 0.5 percent.

Scott Brown, technical strategist for LPL Financial, said that the technology sector “recently hit a 52-week relative high and we believe that sets up a favorable outlook heading into 2022”.

However, Vital Knowledge’s Adam Crisafulli noted: “For a second consecutive session the underlying price action is a lot weaker than the headline indices make it seem with a handful of large stocks masking selling elsewhere.”

Meanwhile, Liberty Media Chairman John Malone told CNBC that the current situation in the stock market reminds him of the dot-com bubble in the late 1990s.

“There’s no question that the equity markets right now are so interested in growth above all other criteria and this is, like, the bubble in the late ’90s ... through 2000,” said Malone.

Markets mixed, “more susceptible to corrections”

Markets were mixed on Wednesday.

The S&P 500 fell 0.2 percent but the STOXX Europe 600 rose 0.1 percent.

in Asia, the Nikkei 225 fell 0.4 percent but the Shanghai Composite rose 0.4 percent.

US stocks fell despite strong earnings reports from retailers.

Goldman Sachs’ Jeff Currie noted “increasing margin pressures in the wake of supply chain issues and labor shortages” among the retailers while Keith Buchanan, portfolio manager at Globalt Investments, said that “the costs of running those businesses are outpacing the strong consumer”.

In Europe, the European Central Bank warned in its biannual stability report released on Wednesday that valuations in many asset markets are becoming stretched.

The ECB said in the report that “risk-taking by non-banks and elevated sovereign and corporate debt are building up” and equity and risky asset markets are becoming “more susceptible to corrections”.

Markets rise, US retail sales jump

Markets were mostly higher on Tuesday.

The S&P 500 rose 0.4 percent, the STOXX Europe 600 rose 0.2 percent and the Nikkei 225 rose 0.1 percent.

US stocks were boosted by a report showing that retail sales rose 1.7 percent in October.

“With the robust retail sales read and solid start to retail earnings, it’s crystal clear that inflation isn’t standing in the way of consumers,” said E-Trade’s Mike Loewengart.

El-Erian: Fed losing credibility over inflation

“I think the Fed is losing credibility,” Mohamed El-Erian, chief economic advisor at Allianz, told CNBC on Monday.

“We are in this transition of central banks mischaracterizing inflation. The repeated narrative: ‘It is transitory, it is transitory, it is transitory.’ It is not transitory,” El-Erian said.

He said that there are “behavioral changes going on” that could cause inflation to “last for a while”.

El-Erian suggested that the Fed should accelerate the pace of tapering of its bond purchases and start preparing people for higher interest rates.

Stocks “to grind higher”, inflation could be key

The S&P 500 fell 0.3 percent last week, snapping a five-week winning streak.

Many analysts expect stocks to resume its rally though.

“I think we could be pretty constructive for the next couple of quarters,” said Trivariate Research founder Adam Parker.

Inflation could be key, said Bleakley Advisory Group chief investment officer Peter Boockvar, adding that it “will continue to dominate the headlines and the news flow in markets and what the Fed does”.

National Securities chief market strategist Art Hogan said he expects stocks to “continue to grind higher”.and supply chain issues to get sorted out.

In contrast, Independent Solutions Wealth Management portfolio manager Paul Meeks thinks that supply chain problems has resulted in a semiconductor shortage that might take years to resolve.

“This might be a problem that persists deep into 2023,” he said.

Markets mixed, US inflation highest in over 30 years

Markets were mixed on Wednesday.

The S&P 500 fell 0.8 percent and the Nikkei 225 fell 0.6 percent. However, the STOXX Europe 600 rose 0.2 percent.

“The CPI report today contributed to the weakness,” Liz Ann Sonders, Charles Schwab chief investment strategist, said after a report on Wednesday showed that US consumer prices rose 6.2 percent from a year ago, the most since December 1990.

“If inflation doesn’t subside, the Federal Reserve may need to taper at a more substantial rate and hike interest rates, which could hurt stocks and bonds,” Nancy Davis, founder of Quadratic Capital Management, said.

Indeed, Seema Shah, chief strategist at Principal Global Investors, said: “Inflation is clearly getting worse before it gets better, while the significant rise in shelter prices is adding to concerning evidence of a broadening in inflation pressures.”

However, some economists noted that a fall in the Baltic Dry Index provides hope that inflation will abate.

“The decline in the Baltic Dry Index may be signaling that some of the overheating in the economy that has been taking place is reversing itself,” said Gus Faucher, chief economist at PNC Financial Services.

US stocks fall, producer prices jump

Markets were mostly lower on Tuesday, with the S&P 500 falling 0.4 percent to end an 8-day winning streak.

A report on Tuesday showed that US producer prices rose 0.6 percent in October. Wholesale prices jumped 8.6 percent in October from a year ago, the highest annual pace in records going back nearly 11 years.

“Bottom line, while today’s data was as expected, the numbers are certainly eye opening in terms of the pace of gains,” Bleakley Advisory Group chief investment officer Peter Boockvar said in a note.

S&P 500 hits record high, “risks showing signs of improvement”

Markets were mixed on Monday.

The S&P 500 rose 0.1 percent to a record high while the STOXX Europe 600 was little-changed.

In Asia, the Shanghai Composite rose 0.2 percent but the Nikkei 225 fell 0.4 percent.

China had reported over the weekend that its exports surged 27.1 percent in October from a year ago.

“We expect Equities to continue to climb the ‘wall of worry’, as risks look largely priced in and showing signs of improvement,” JPMorgan’s Marko Kolanovic said in a note on Monday.

S&P 500 at record high, could go higher still

The S&P 500 rose 2 percent last week, ending at a record high of 4,697.53 after a run of seven consecutive positive sessions.

Some analysts think that stocks could soar to new heights in the week ahead.

“The important drivers of the market, I think, remain intact — earnings and interest rates,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management.

“Right now the path of least resistance is higher,” said Steve Sosnick, chief strategist at Interactive Brokers.

And the threat from COVID-19 is receding, with Pfizer board member Dr Scott Gottlieb, a former commissioner of the Food and Drug Administration, saying that the pandemic could be over in the US by January.

Another threat, though, could remain: inflation.

“The biggest concern is inflation which we don’t think is transitory,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “I would look for a rate hike almost immediately after the tapering process is done which is mid-2022.”

US stocks rise, job gains better than expected

Markets were mixed on Friday.

The S&P 500 rose 0.4 percent, its seventh consecutive day of gains, but the STOXX Europe 600 was little-changed and the Nikkei 225 fell 0.6 percent.

A report on Friday showed that the US economy added 531,000 jobs in October.

“Markets are cheering a much better than expected jobs report this morning as nonfarm payrolls smashed expectations,” said Cliff Hodge, chief investment officer at Cornerstone Wealth.

Economic data from Europe were not as positive, with eurozone retail sales falling 0.3 percent in September and German industrial production falling 1.1 percent.

US and European stocks hit record highs

Markets rose on Thursday.

The S&P 500 rose 0.4 percent to a record high, the STOXX Europe 600 also rose 0.4 percent to a record high and the Nikkei 225 rose 0.9 percent.

A report in the US on Thursday showed that jobless claims totalled 269,000 for the week ended 30 October, the lowest in the pandemic era.

“This could stand as another proof point of solid gains when it comes to our economic recovery,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial.

In the UK, the Bank of England left its benchmark lending rate unchanged on Thursday, surprising many investors who had expected a rate hike.

David Madden, market analyst at Equiti Capital, said that “rates could remain on hold for some several months to come”.

Fed to start taper, S&P 500 hits record high

The Federal Reserve announced on Wednesday that it will start tapering the pace of its asset purchases later this month.

The Fed said the move came “in light of the substantial further progress the economy has made toward the Committee’s goals since last December”.

The Fed left interest rates unchanged, noting in its statement that the elevated inflation is “largely reflecting factors that are expected to be transitory”.

The US stock market took the announcement in its stride. The S&P 500 rose 0.6 percent to another record high.

Ryan Detrick, chief market strategist for LPL Financial, said that “earnings continue to come in way better than expected and are helping to justify stocks are current levels”.

S&P 500 hits new record, Nikkei surges

Markets rose on Monday.

The S&P 500 rose 0.2 percent to a record high, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 surged 2.6 percent.

Fundstrat’s Tom Lee said that the strengthening global recovery is driving equities and with vaccinations and boosters for COVID-19, “the improvement in health care risk could materially accelerate in 2022”.

The Institute for Supply Management reported on Monday that its US manufacturing index fell to 60.8 in October from 61.1 in September.

In China, the Caixin/Markit manufacturing purchasing managers’ index rose to 50.6 in October from 50.0 in September.

However, China’s official manufacturing PMI fell to 49.2 in October from 49.6 in September.

Wang Zhe, senior economist at Caixin Insight Group, said: “Supply strains became the paramount factor affecting the economy.”

US stocks at record high as inflation hits 30-year high

Markets rose on Friday.

The S&P 500 rose 0.2 percent to a record high, the STOXX Europe 600 rose 0.1 percent and the Shanghai Composite rose 0.8 percent.

Investors shrugged off news of continuing high inflation.

In the US, a report on Friday showed that the personal consumption expenditures price index rose 4.4 percent in September from the previous year, the biggest jump since January 1991.

Meanwhile eurozone inflation hit a 13-year high of 4.1 percent in October.

Angelo Kourkafas, an investment strategist at Edward Jones, said that while companies face cost pressures, “profitability has remained fairly resilient because of strong demand and pricing power”.

S&P 500 hits another record high

Markets were mostly higher on Thursday.

The S&P 500 rose 1.0 percent to a record high while the STOXX Europe 600 rose 0.2 percent. However, the Nikkei 225 fell 1.0 percent.

US investors shrugged off a report on Thursday showing that the economy grew at an annualised rate of 2.0 percent in the third quarter, below the 2.8 percent expected.

“Earnings have helped and a reminder that US reporting so far has been better than the long-term average in terms of beats,” Jim Reid, head of thematic research at Deutsche Bank, said in a note.

Elsewhere, the European Central Bank and the Bank of Japan left interest rates unchanged at their monetary policy meetings on Thursday.

“While the current phase of higher inflation will last longer than originally expected, we expect inflation to decline in the course of next year,” ECB President Christine Lagarde said at a press conference after its meeting.

US stocks fall, “economy still fundamentally strong”

The S&P 500 fell 0.5 percent on Wednesday.

However, analysts see scope for more gains ahead.

“Seasonal tailwinds, improving market internals, and clear signs of a peak in the delta variant all provide potential fuel for equities heading into year-end, and we maintain our overweight equities recommendation as a result,” said Ryan Detrick, chief market strategist for LPL Financial.

Economists are also unconcerned about an expected slowdown in US third-quarter GDP growth.

Natixis chief economist for the Americas Joseph LaVorgna said that the slowdown “is a function of supply distortions more than anything” and that the “economy is still fundamentally strong”.

Markets rise, Fed “about to shift course”

Markets rose on Tuesday.

The S&P 500 rose 0.2 percent to a record high, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 surged 1.8 percent.

Craig Johnson, Piper Sandler’s chief market technician, said: “Corporate earnings have been the key catalyst behind the recent record-high rally as robust demand continues to offset well-known supply constraints and pricing pressures.”

However, Ryan Detrick, chief market strategist at LPL Financial, warned: “With stocks at all-time highs, the bar is indeed quite high and tech will need to impress to help justify stocks at current levels.”

Indeed, David Rosenberg, the president of Rosenberg Research, told CNBC on Monday: “The market has gone up way beyond what should be justified by even strong earnings, and that’s because of the Fed.”

Rosenberg said that “the Fed is about to shift course” and “my advice is to start taking chips off the table at these levels”.

S&P 500 hits record high amid “rising tide of earnings”

The S&P 500 rose 0.5 percent to a record high on Monday.

“Rising tide of earnings is lifting all the boats and adding fuel to the bull market fire,” said Anu Gaggar, global investment strategist at Commonwealth Financial Network.

In the meantime, though, supply chain problems are likely to continue to pose problems for companies.

“Backlogs and elevated shipping costs are likely to persist at least through the middle of next year because no immediate solution for the underlying supply-demand imbalance at US ports is available,” Goldman economist Ronnie Walker said in a note to clients.

Hyperinflation coming soon?

Twitter co-founder Jack Dorsey has warned that hyperinflation is coming.

“It will happen in the US soon, and so the world,” he tweeted on Friday.

While Dorsey's forecast for hyperinflation is an outlier, the expectation for high inflation to be somewhat persistent has become more common.

DoubleLine Capital head Jeffrey Gundlach said that “2021 will end with a 5-handle” on the consumer price index and “we don’t think inflation is going below 4% anytime in 2022”.

Meanwhile, in the UK, the Bank of England's top economist Huw Pill said that the country could “see an inflation print close to or above 5%” in the months ahead.

Capital Economics analysts wrote last week that “we now think temporary shortages will restrain GDP for longer and boost inflation by more than we previously thought”.

Markets mixed, face longer-term “headwinds”

Markets were mixed on Friday.

The S&P 500 dipped 0.1 percent but the STOXX Europe 600 rose 0.5 percent.

In Asia, the Nikkei 225 rose 0.3 percent while China Evergrande Group surged 4.3 percent on a report that the company was preparing to pay the interest on a bond.

Stephen Kolano, chief investment officer of BNY Mellon Investor Solutions, said: “The setup into year-end looks great given the liquidity dynamics on corporate buybacks, but longer term there are still the unresolved headwinds of valuation, the transition to mid-cycle in the economy, and a tightening Fed that may prove challenging now that we’re back at all-time highs.”

S&P 500 hits record high amid strong earnings

The S&P 500 hit a record high on Thursday, rising 0.3 percent.

The rally was widely attributed to strong earnings from companies as inflation concerns get pushed aside.

“There are no signs of widespread erosions of margins at the moment,” Jim Reid, head of thematic research at Deutsche Bank, said in a note.

Indeed, Jim Paulsen of the Leuthold Group noted that “elevated inflation appears to bolster S&P 500 EPS on the whole”.

Adding to the optimism on Thursday was a report showing that jobless claims in the US fell to a new pandemic low of 290,000 last week.

Evergrande plunges after asset sale falls through

China Evergrande shares fell 12.5 percent on Thursday, its first day of trading after a halt that lasted more than two weeks.

The plunge came after a deal to sell some of its assets to Hopson Development Holdings fell through.

Evergrande had said late Wednesday that since selling its US$1.5 billion stake in Shengjing Bank in late September, “there has been no material progress on sale of assets of the Group”.

Elsewhere in Asia, the Nikkei 225 plunged 1.9 percent but the Shanghai Composite rose 0.2 percent.

Supply chain problems may be near an end

The S&P 500 rose 0.7 percent on Tuesday, its fifth consecutive gain.

US stocks have been boosted by strong third-quarter earnings reports. 82 percent of S&P 500 companies that have reported earnings beat expectations, according to FactSet.

“The financials got earnings season off to another strong start, but let’s be honest, COVID and supply chain issues aren’t going to impact this group. Now it gets very interesting to see what other industries will have to say about the health of the economic recovery,” said Ryan Detrick, chief market strategist at LPL Financial.

While supply chain issues has the potential to derail the market rally, some say the worst may be near an end.

“There's a very good chance that a year from now that we won't be talking about supply chains at all,” said JPMorgan Chase CEO Jamie Dimon.

Analysts at Jefferies said in a recent report that while the global supply chain has been stretched thin, “we may be already witnessing the worst of it” and the “impact is likely to ease” by the first half of 2022.

Markets mixed, supply chain problems “will get worse”

Markets were mixed on Monday.

The S&P 500 rose 0.3 percent but the STOXX Europe 600 fell 0.5 percent and the Shanghai Composite fell 0.1 percent.

US investors shrugged off news of a worse-than-expected 1.3 percent decline in industrial production in September.

Edward Moya, senior market analyst at Oanda, noted that “the consumer looks strong heading into the holiday season” while Ed Hyman, Evercore ISI Chairman, said that supply chain problems “are likely to ease” and wages “are likely to increase, lifting consumer incomes”.

However, some analysts are less sanguine about the supply chain problems, with Tim Uy of Moody’s Analytics saying that they “will get worse before they get better”.

China's GDP growth disappoints

China reported disappointing third quarter economic growth on Monday.

The National Bureau of Statistics reported that gross domestic product grew 4.9 percent in the third quarter from a year ago, lower than expectations for a 5.2 percent expansion.

“Since entering the third quarter, domestic and overseas risks and challenges have increased,” Fu Linghui, spokesperson for the National Bureau of Statistics, said at a press conference.

Ahead of this report, most major investment banks had already trimmed their economic predictions for China for the year.

CNBC’s estimate for China’s full-year GDP based on forecasts from 13 major banks shows growth of 8.2 percent this year, down 0.3 percentage points from the prior median forecast.

Markets rise, US retail sales show surprise gain

Markets rose on Friday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 rose 0.7 percent and the Nikkei 225 surged 1.8 percent.

US stocks were buoyed by strong earnings reports. According to FactSet, 80 percent of the 41 S&P 500 companies that have reported third-quarter results have topped earnings-per-share expectations.

In addition, a report on Friday showed that US retail sales posted a surprise increase in September, rising 0.7 percent.

“Services spending may see some renewed strength over the next couple of months, as virus cases continue to drop back,” Capital Economics senior US economist Andrew Hunter wrote. “But with goods shortages likely to persist, and the resulting surge in prices eating into real incomes, we expect consumption growth to remain subdued.”

Markets rise, supply chain problem to last “well into” 2022

Markets rose on Thursday.

The S&P 500 surged 1.7 percent, the STOXX Europe 600 rose 1.2 percent and the Nikkei 225 jumped 1.5 percent.

“So far, the overwhelming majority of large US companies have been able to generate higher profitability despite rising labor costs because sales growth has been so robust. We expect the same to be true in 3Q,” Mark Haefele, chief investment officer of UBS Global Wealth Management, said in a note.

However, supply chain issues may continue to pose problems.

A survey of CFOs has shown that the majority of them expect the problem to last “well into” 2022.

Markets higher, Fed could begin tapering in November

Markets were mostly higher on Wednesday.

The S&P 500 rose 0.3 percent and the STOXX Europe 600 rose 0.7 percent.

Earlier in Asia, the Shanghai Composite rose 0.4 percent but the Nikkei 225 fell 0.3 percent.

A report in the US showed that the consumer price index rose 0.4 percent in September and 5.4 percent year over year.

Minutes from the Federal Open Market Committee’s September meeting released on Wednesday showed that the central bank could begin tapering its asset-purchase programme as soon as mid-November.

“Much of these inflationary pressures are transitory, but that doesn’t stop them from having a dampening impact on activity,” said Seema Shah, chief strategist at Principal Global Investors.

IMF cuts US growth forecast

Markets were mostly lower on Tuesday, with the S&P 500 falling 0.2 percent.

In the latest International Monetary Fund World Economic Outlook published on Tuesday, global gross domestic product is forecast to grow by 5.9 percent this year, 0.1 percentage point lower than the estimate in July.

The IMF cut its growth forecast for the US this year by 1 percentage point to 6 percent.

Meanwhile, the IMF said that the outlook for the low-income developing country group “has darkened considerably due to worsening pandemic dynamics”.

“Inflation risks are skewed to the upside and could materialize if pandemic-induced supply-demand mismatches continue longer than expected,” the IMF added.

Markets mixed, oil price rise poses recession risk

Markets were mixed on Monday.

The S&P 500 fell 0.7 percent, the Nikkei 225 rose 1.6 percent while the STOXX Europe 600 was little-changed.

US oil benchmark WTI crude oil topped US$82 a barrel at its session highs on Monday and Bernstein’s Neil Beveridge said in a Monday note: “High or rapid increase in energy costs have triggered recessions in the past and there is a possibility that history could repeat itself if energy prices continue to rise.”

Goldman Sachs on Monday cut its US economic growth forecast for 2022 to 4 percent from 4.4 percent.

Meanwhile, analysts estimate an earnings growth rate of 27.6 percent for the S&P 500 in the third quarter, which would be the third-highest growth rate since 2010.

Markets mixed, US jobs report disappoints

Markets were mixed on Friday.

The S&P 500 fell 0.2 percent and the STOXX Europe 600 fell 0.3 percent.

However, Asian stocks rose, with the Shanghai Composite up 0.7 percent and the Nikkei 225 up 1.3 percent.

US stocks were weighed down by a disappointing employment report, which showed just 194,000 job gains in September.

“This jobs number could call into question the starting point for taper late this year,” said Jamie Cox, managing partner for Harris Financial Group.

Still, the Federal Reserve will have to keep an eye on inflation as oil prices rose on Friday, with West Texas Intermediate crude futures crossing US$80 per barrel for the first time since November 2014.

Markets rise, US reaches debt ceiling deal

Markets rose on Thursday.

The S&P 500 rose 0.8 percent, the STOXX Europe 600 jumped 1.6 percent and the Nikkei 225 rose 0.5 percent.

US stocks were boosted by news that lawmakers had reached a deal on a short-term debt ceiling increase.

Economic data on Thursday were mixed.

The US reported that initial filings for unemployment benefits totalled 326,000 for the week ended 2 October, down from the previous week’s 364,000.

However, Germany reported that industrial output fell by 4 percent in August following an increase of 1.3 percent in July.

Markets mixed, “roller-coaster market to stick around”

Markets were mixed on Wednesday.

The S&P 500 rose 0.4 percent but the STOXX Europe 600 fell 1.0 percent and the Nikkei 225 fell 1.1 percent.

News that Senate Minority Leader Mitch McConnell would offer a short-term debt ceiling extension later Wednesday helped shore up US stocks.

Still, some analysts remain cautious on market prospects.

“We expect the October roller-coaster market to stick around for a bit longer,” said Ryan Detrick of LPL Financial.

Markets rise, “equity rally to get back on track”

Markets were mostly higher on Tuesday.

The S&P 500 rose 1.1 percent and the STOXX Europe 600 rose 1.2 percent. However, the Nikkei 225 fell 2.2 percent.

Analysts are optimistic on the prospects for stocks.

“We do not believe the recent bout of de-risking will lead to sustained falls, and maintain the stance to keep buying into any weakness,” Marko Kolanovic, JPMorgan’s chief global markets strategist, said in a note Monday.

Mark Haefele, chief investment officer of global wealth management at UBS, said “we expect the equity rally to get back on track”.

Markets fall even as COVID-19 worries recede

Markets fell on Monday.

The S&P 500 fell 1.3 percent, STOXX Europe 600 fell 0.5 percent and the Nikkei 225 fell 1.1 percent.

Trading in shares of China Evergrande was halted. The company said it requested the trading halt ahead of an announcement about a “major transaction”.

Meanwhile, John Stoltzfus, Oppenheimer Asset Management’s chief investment strategist, noted on Monday that “investor worries about COVID-19 and its variant seem to have begun to play a lesser day-to-day ‘worry role’ in the markets of late”.

“The on-again, off-again nervousness about Federal monetary policy, the disruption among supply chains and the potential for higher taxes (along with other concerns such as inflation risk and higher taxes) have kept market enthusiasm in check,” wrote Stoltzfus.

Leuthold Group chief investment strategist Jim Paulsen said that with the economy reopening from COVID-19-related restrictions, “commodities are rising, bond yields are rising, cyclical sectors and small cap stocks are outpacing, and technology and growth stocks in general are underperforming”.

Higher demand, supply crunch leading to inflationary “perfect storm”

The S&P 500 fell 2.2 percent last week.

Stocks fell amid concerns over persistent inflation and rising bond yields.

Federal Reserve Chair Jerome Powell said at a European Central Bank event on Wednesday that bottlenecks and supply chain problems are “holding up inflation longer than we had thought”.

Data released on Friday showed that the price index for core personal consumption expenditures in the US rose 3.6 percent year-on-year in August, the biggest increase in more than 30 years, while inflation in September in the euro area rose 3.4 percent on an annual basis, the highest reading since September 2008.

Over the weekend, Martin Farrer at the Guardian wrote that “a supply crunch that initially put a question mark over the availability of luxury cars or whether there would be enough PlayStations under our Christmas trees is instead morphing into a full-blown crisis featuring a shortage of energy, labour and transport from Liverpool to Los Angeles, and from Qingdao to Queensland”.

“The supply chain problems are much more persistent than most policymakers expected, although companies are less surprised,” said Mohamed El-Erian, an adviser to the insurance giant Allianz and president of Queens’ College, Cambridge. “Governments are having to rethink quickly because the three elements – supply side, transport, labour – are coming together to blow a stagflationary wind through the global economy.”

“Consumers are crazy to buy things because the world is awash with dollars from government stimulus, higher savings and pent-up demand,” said Flavio Romero Macau, a supply chain expert at Edith Cowan University in Western Australia. “Higher demand and restricted supply equals inflation: there’s no way out of it. You put all these things together and its a perfect storm.”

Markets mixed, “good opportunity for investors”

Markets were mixed on Friday.

The Nikkei 225 plunged 2.3 percent and the STOXX Europe 600 fell 0.4 percent.

However, the S&P 500 rose 1.2 percent and the Nasdaq Composite snapped a five-day losing streak to rise 0.8 percent.

High inflation was apparent in the data released on Friday.

In the US, the price index for core personal consumption expenditures showed a 3.6 percent year-on-year rise in August, the biggest increase in more than 30 years .

In the euro zone, inflation in September rose 3.4 percent on an annual basis, the highest reading since September 2008.

However, Fundstrat’s Tom Lee said that while “there’s a lot of headwinds here...when the wall of worry is big, that’s often a good opportunity for investors”.

Markets fall, “will stay rocky”

Markets were mostly lower on Thursday.

The S&P 600 fell 1.2 percent, the Nikkei 225 fell 0.3 percent and the STOXX Europe 600 closed marginally lower.

Despite the falls, Ed Yardeni of Yardeni Research said that “analysts remain relatively sanguine”.

Indeed, David Bianco of DWS Group said that “we don’t expect a correction”.

Still, Adam Crisafulli of Vital Knowledge said that “the coming weeks will stay rocky”.

Markets mixed, “choppy conditions will persist”

Markets were mixed on Wednesday.

Early in the day, Asian stocks fell, with the Nikkei 225 plunging 2.1 percent.

However, the S&P 500 rose 0.2 percent and the STOXX Europe 600 rose 0.6 percent.

Lori Calvasina from RBC Capital Markets said “we think choppy conditions in U.S. equities will persist a while longer”.

Indeed, Federal Reserve Chair Jerome Powell said at a European Central Bank event on Wednesday that bottlenecks and supply chain problems are “holding up inflation longer than we had thought”.

Stocks plunge as US Treasury yields rise

Markets fell on Tuesday.

The S&P 500 plunged 2.0 percent, the STOXX Europe 600 sank 2.2 percent and the Nikkei 225 fell 0.2 percent.

The US 10-year Treasury yield rose, hitting 1.567 percent.

“The market’s been steadily coming around to the reality that yields were awfully low relative to the fundamentals,” said Kathy Jones, chief fixed income strategist at the Schwab Center for Financial Research.

Some analysts think stocks could slide further.

CFRA chief investment strategist Sam Stovall said “with tech being down 2.5% with interest rates higher, I would think there is still more downside potential”.

Markets mixed, Evergrande surges

Markets were mixed on Monday.

The S&P 500 fell 0.3 percent as Treasury yields rose

In Europe, a 1.1 percent fall in the SMI dragged the STOXX Europe 600 down 0.2 percent even as most other major European markets closed higher.

In Asia, the Shanghai Composite fell 0.8 percent even as Evergrande shares in Hong Kong surged 8 percent while the Nikkei 225 was flat.

Markets mixed, Evergrande falls again

Markets were mixed on Friday.

The S&P 500 rose 0.1 percent but the STOXX Europe 600 fell 0.9 percent.

Earlier in Asia, the Nikkei 225 surged 2.1 percent but the Shanghai Composite fell 0.8 percent.

Shares of China Evergrande Group in Hong Kong fell 11.6 percent after Chinese authorities reportedly told local officials to prepare for a potential demise of the company.

The mixed performance of markets reflected investor sentiment, with Ryan Detrick, chief market strategist for LPL Financial, saying that “many of the worries over Evergrande, a slowing economy, and continued supply chain issues are still out there”.

Markets rise, Evergrande jumps

Markets rose on Thursday.

The S&P 500 rose 1.2 percent, the STOXX Europe 600 rose 0.9 percent and the Shanghai Composite rose 0.4 percent.

Shares of China Evergrande Group jumped 17.6 percent after it resolved payment on a local bond.

The S&P 500 posted a second consecutive day of gains after the Federal Reserve on Wednesday indicated no immediate removal of stimulus policies.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said that “we are constructive on the U.S. economy in general and believe that any dips would be worth buying as the fundamentals are still sound and recession appears to be more than a year away at this point”.

Markets mixed as US rebound fails

Markets were mixed on Tuesday.

While the STOXX Europe 600 rose 1.0 percent, an attempt at a rebound failed in the US, with the S&P 500 ending 0.1 percent lower.

The Evergrande crisis continued to weigh on investors' minds.

Ed Yardeni of Yardeni Research said that the Chinese government will not let the firm fail and will intervene to restructure it. “When they do, stock markets around the world should enjoy relief rallies,” he said.

In the meantime, though, Canaccord Genuity Chief Market Strategist Tony Dwyer said that “we would expect a bit more indigestion and begin adding risk back into the market on any further weakness as the bottoming process begins”.

Markets fall, Evergrande crisis poses a “contagion issue”

Markets fell sharply on Monday.

Following falls in Asia, where the Hang Seng sank 3.3 percent, the S&P 500 and STOXX Europe 600 both fell 1.7 percent.

Investment sentiment was shaken by fears surrounding property developer China Evergrande Group.

“It has $300 billion in outstanding debt,” said Jimmy Chang, chief investment officer at Rockefeller Global Family Office. “There is a contagion issue if China Evergrande is not resolved.”

Hong Kong stock market plunges amid Evergrande woes

Hong Kong's Hang Seng Index plunged 3.3 percent on Monday, leading losses in Asian trading.

Shares of China Evergrande Group dived 10.24 percent, after falling as much as 17 percent earlier.

Property giant Evergrande is on the brink of collapse, with a debt load of more than US$300 billion.

“Evergrande’s collapse would be the biggest test that China’s financial system has faced in years,” says Mark Williams, chief Asia economist at Capital Economics.

Elsewhere in the region, the S&P/ASX 200 in Australia fell 2.1 percent while the Chinese and Japanese markets were closed.

Markets mixed, “finely poised for very big move”

Markets were mixed on Friday.

The S&P 500 and STOXX Europe 600 fell 0.9 percent.

However, earlier in Asia, markets were higher, with the Nikkei 225 up 0.6 percent and the Shanghai Composite up 0.2 percent.

Some analysts have noted that the US stock market is undergoing a slow motion deterioration.

“For the last several months, most stocks have declined more frequently than they have advanced--evidence of a weakening market condition,” CFRA chief investment strategist Sam Stovall said in a recent note to clients.

Paul Gambles, co-founder of investment advisory firm MBMG Group, said that “the market is very finely poised waiting for what potentially could be a very, very big move” and “unless you can really afford to take what could be a pretty big hit, and possibly even a permanent hit, then it is better to just sit on the sidelines”.

Markets mixed, US retail sales post surprise gain

Markets were mixed on Thursday.

The S&P 500 fell 0.2 percent and the Nikkei 225 fell 0.6 percent.

However, the STOXX Europe 600 rose 0.4 percent.

The fall in US stocks was cushioned by a surprise 0.7 percent rise in retail sales in August.

Markets mixed, Chinese retail sales disappoint

Markets were mixed on Wednesday.

The S&P 500 rose 0.8 percent but the STOXX Europe 500 fell 0.8 percent and the Nikkei 225 fell 0.5 percent.

“We remain positive on the equity outlook, and expect S&P 500 to reach 4,700 by end of this year and surpass 5,000 next year on better than expected earnings,” JPMorgan strategist Dubravko Lakos-Bujas wrote in a note on Wednesday.

However, China's economy suffered a setback in August.

Retail sales rose 2.5 percent last month from a year ago, well below the 7 percent growth forecast by analysts polled by Reuters. Industrial production rose 5.3 percent, also below expectations.

Markets mixed, US inflation lower than expected

Markets were mixed on Tuesday.

The S&P 500 fell 0.6 percent while the STOXX Europe 600 was flat.

Earlier in Asia, the Shanghai Composite fell 1.4 percent but the Nikkei 225 rose 0.7 percent.

A report showing that US consumer prices posted a smaller-than-expected 5.3 percent increase in August from a year ago failed to lift stocks.

“What we need to see to be fundamentally markets supportive is a continued easing in the inflation piece without deterioration in the economic outlook,” said Liz Ann Sonders, Charles Schwab chief investment strategist.

S&P 500 rises as COVID-19 cases fall

The S&P 500 rose 0.2 percent on Monday, its first rise in six days.

US stocks rose as COVID-19 case counts in the country showed signs of easing.

Based on data compiled by Johns Hopkins University, the seven-day average of daily COVID-19 cases was 144,300 on 12 September. That is down 12 percent over the past week and 14 percent from the most-recent peak in case counts on 1 September.

Dr Arturo Casadevall, chair of molecular microbiology and immunology at the Johns Hopkins Bloomberg School of Public Health, said that this could mean that “we have reached a peak and we are now on the way down”.

That is encouraging to investment analysts.

“We retain a pro-risk allocation on strong global growth as the world continues to recover from the pandemic, accommodative policy, and continuing earnings surprises,” JPMorgan’s Marko Kolanovic said in a note Monday.

Still, inflation remains a concern.

“Supply bottlenecks, inventory shortages, higher commodity prices, and higher shipping rates have all contributed to higher input costs,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

US may be seeing peak in both COVID-19 and economic growth

In his latest commentary, John Hussman, president of Hussman Investment Trust, stated that he has a defensive outlook for the stock market.

“Amid the most extreme valuations in history, we’ve observed gradual deterioration in our measures of internals in recent months, with breakdowns among individual stocks in the broad market accelerating in recent weeks,” he said.

Hussman is relatively optimistic on the COVID-19 front, saying that “we’ve reached the peak of the Delta wave” and expects that the “pandemic will rapidly subside in the weeks ahead”.

However, on the economic front, Hussman thinks a reduction in Federal deficit spending will offset the expected increase in private economic activity.

“It’s not at all clear that gross economic activity will increase,” he said.

Similarly, Amanda Agati, chief investment officer at PNC Financial Services Group, told CNBC on Friday that the signs point to “peak growth” right now.

This could set the stock market up for a correction.

“It’s just trying to be really realistic about how far and how fast the market has rallied and how extended valuations really are across the board, leaving fairly little headroom in the short run here for the market to keep forging this path higher,” she said.

Markets fall, central banks expected “to remain supportive of growth”

Markets were mostly lower on Friday.

The S&P 500 fell 0.8 percent, the STOXX Europe 600 fell 0.3 percent. However, the Nikkei 225 jumped 1.2 percent.

A report on Friday showed that US producer prices jumped 8.3 percent in August from a year ago.

“Investors are wringing their hands over growth but are seeing higher inflation at the same time,” noted Jack Ablin, Cresset Capital Management’s founding partner and CIO.

Still, Mark Haefele, UBS Global Wealth Management chief investment officer, said: “We expect major central banks to remain supportive of growth, keeping rates lower for longer. This is positive for equity markets, particularly cyclical and value areas of the market.”

In Europe, HSBC economists Simon Wells and Fabio Balboni suggested that “the relatively dovish upward revision to the inflation forecast should reassure markets that more support is coming” from the European Central Bank.

“Ultimately, we see stocks finishing September strongly,” wrote Fundstrat’s Tom Lee in a note.

Markets fall, ECB to slow asset purchases

Markets were mostly lower on Thursday.

The S&P 500 fell 0.5 percent, the STOXX Europe 600 dipped 0.1 percent and the Nikkei 225 fell 0.6 percent.

The European Central Bank left its key interest rate unchanged at zero at its monetary policy meeting on Thursday but announced that it will slow the pace of its emergency asset purchases.

“Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the (PEPP) than in the previous two quarters,” the ECB said in a statement.

S&P 500 to reach “new high by year end”

Markets were mostly lower on Wednesday.

The S&P 500 fell 0.1 percent and the STOXX Europe 600 fell 1.1 percent. However, the Nikkei 225 rose 0.9 percent.

Inflation concerns were renewed on Wednesday after the Federal Reserve's Beige Book report showed that businesses are experiencing rising inflation even as growth moderated.

“Equities are likely to have a pullback at some point, likely driven by another reset in real yields higher, but other tailwinds should drive the S&P 500 to a new high by year end,” UBS told clients on Wednesday.

Indeed, Mark Zandi, chief economist of Moody's Analytics, wrote in a CNN article that while the Delta variant of COVID-19 “weighs on the economic recovery, odds remain good that it won't short-circuit it”.

Markets mixed, US faces “outsized risk”

Markets were mixed on Tuesday.

The S&P 500 fell 0.3 percent and the STOXX Europe 600 fell 0.5 percent.

However, Asian markets rose, with the Shanghai Composite up 1.5 percent and the Nikkei 225 up 0.9 percent.

Over the weekend, Goldman Sachs cut its US fourth-quarter annualised GDP growth rate to 5.5 percent, down from 6.5 percent, saying that “fading fiscal stimulus and a slower service sector recovery will both be headwinds in the medium term”.

On Tuesday, Morgan Stanley downgraded US equities to underweight, saying that “the next two months carry an outsized risk to growth, policy and the legislative agenda”.

There was more positive news though from Asia, where a report on Tuesday showed that China’s exports jumped 25.6 percent year-over-year in August, above expectations for a 17.1 percent rise.

Markets rise, Fed expected to delay taper

Markets rose on Monday.

The STOXX Europe 600 rose 0.7 percent and the Nikkei 225 jumped 1.8 percent. The US stock market was closed for a holiday.

Investors appear unfazed by the lower-than-expected number of job gains in the US August employment report on Friday.

“In our view, the setback in the recovery in the labour market and the jump in serious covid infections will encourage the FOMC to wait before it announces it will taper its monthly asset purchases. We now expect the FOMC to announce an $US10bn taper of its monthly asset purchases at its 3 November meeting,” analysts at Commonwealth Bank of Australia wrote in a Monday note.

Indeed, Fundstrat Global Advisors’ co-founder and head of research Tom Lee told CNBC on Friday: “We could have a really strong rally in September.”

However, Lee also warned of a potential 10 percent correction in October.

S&P 500 near record high amid “huge amount of froth”

The S&P 500 rose 0.6 percent last week, ending just off a record high.

However, some analysts are warning that the strong run in equities may be close to an end.

“There’s a huge amount of froth in the marketplace right now much like we’ve seen in other important tops of the market that only became obvious in hindsight,” Miller Tabak chief market strategist Matt Maley said on CNBC last Thursday.

Maley cited red flags like “the meme stocks which are flying ... SPACs that are going crazy here ... a stock market that’s very, very expensive, and a market that is overbought”.

Gina Sanchez, chief market strategist at Lido Advisors and CEO of Chantico Global, suggested that investors look out for catalysts that could prompt a downturn.

“The first catalyst I see is just the fact that we have priced in very strong expectations,” Sanchez said. The strong expectations leave room for disappointment.

“The second and more important catalyst I’m looking for is when the liquidity starts to get dialed in and stepped out of the market. When that happens, I think that’s when you could have a real potential correction,” said Sanchez.

US employment disappoints, inflation could repeat the 1960s

Markets were mixed on Friday.

The S&P 500 finished flat after a report showed that US nonfarm payrolls rose 235,000 in August, well below economists' expectations for a gain of 720,000.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said that based on this report, an announcement by the Federal Reserve of plans to taper bond purchases at this month’s FOMC meeting “is no longer likely”.

However, Goldman Sachs chief economist Jan Hatzius said that “the situation is improving somewhat” and expects “better numbers in coming months”.

Meanwhile, inflation remains a concern and there is a risk that inflation could be repeating the trajectory of the late 1960s.

“My sense is that we are not heading for the 1970s but we could be rerunning the late 1960s, when famously the Fed chair then, McChesney Martin, lost control of inflation expectations,” said economic historian Niall Ferguson.

At record high, S&P 500 rally “to extend further”

Markets were mostly higher on Thursday, with the S&P 500 rising 0.3 percent to another record high.

In the US, a report showed that first-time claims for unemployment insurance totaled 340,000 for the week ended 28 August, the lowest since March 2020.

Mike Loewengart, managing director of investment strategy at E-Trade, said that “on one hand a solid jobs report is a positive indication of economic recovery, and on the other it backs up the Fed’s case to begin tapering”.

Credit Suisse said: “The relentless march higher on low volatility in U.S. equities continues and with breadth, volume positioning and sentiment measures all positive in our view we look for the rally to extend further into new highs yet.”

Chinese manufacturing contracts, US private jobs disappoint

Markets were mostly higher on Wednesday.

While the S&P 500 closed marginally higher, the STOXX Europe 600 rose 0.5 percent and the Shanghai Composite rose 0.7 percent.

Chinese market gains were possibly weighed down by news on Wednesday that the Caixin/Markit manufacturing PMI for August came in at 49.2, suggesting a contraction in manufacturing activity.

US stocks were also possibly weighed down by a report from ADP that private payrolls rose by a less-than-expected 374,000.

Still, Mike Loewengart, managing director of investment strategy at E-Trade, said that the number “means easy money policy continues”.

“This bull market is alive and well and we would view any potential weakness as an opportunity,” said LPL Financial chief market strategist Ryan Detrick.

Recovery is “intact” but stocks still face “myriad of risks”

The S&P 500 slipped 0.1 percent on Tuesday.

However, many analysts remain optimistic on the prospects for stocks.

“We believe that the momentum toward reopening and recovery is intact and that there is further upside to equities,” wrote Mark Haefele, chief investment officer of global wealth management at UBS, in a note.

Wells Fargo strategists wrote in a note that “strong economic and earnings growth and relatively low rates through 2022 should support higher equity prices and sustain the bull market”.

Still, other analysts noted mounting risks for stocks.

Charles Schwab chief investment strategist Liz Ann Sonders said: “Are there a myriad of risks out there that at some point in time could be a risk factor that could lead to more than a 3% or 4% pullback? Absolutely.”

Sonders said that “sadly, the market is still at the mercy” of COVID-19.

BITG head of equity and derivatives strategy Julian Emanuel said that consumer confidence “has already rolled over” and suggested that investors “be prudent”.

S&P 500 hits another record high, earnings “unequivocally strong”

The S&P 500 rose 0.4 percent on Monday to hit another record high.

Ryan Detrick, chief market strategist for LPL Financial, said in a note to clients on Monday that “we expect corporate America’s efficiency and the strength of the reopening to continue to power earnings ahead and lead to additional gains for stocks over the rest of 2021”.

Bank of America suggested that “the earnings profile is unequivocally strong” and even with moderation, “will still be high enough to present a conducive environment for equities”.

Still, Morgan Stanley’s Mike Wilson sees a 10 percent correction soon in the market.

“With record GDP and earnings growth, rising inflation and the rates of infection from the Delta variant peaking, the Fed will feel more pressure to remove what is essentially emergency monetary accommodation,” he wrote.

BTIG’s chief equity and derivatives strategist Julian Emanuel is also cautious, telling CNBC on Monday that the market’s record price action is mimicking late 1999, and it could spark a 10 to 20 percent correction within the next month.

“Be very much aware of the fact that if and when it reverses, the consequences could be severe,” he said.

Emanuel remains bullish over the longer term “because the long-run trend is higher and pullbacks having been bought have been rewarded all along the line”.

The pandemic and China’s economy

China has largely kept the COVID-19 pandemic under control even amid the spread of the Delta variant in the rest of the world.

Still, the country’s economy is likely to be affected by the pandemic, according to Yu Yongding, a former member of the Monetary Policy Committee of the People’s Bank of China.

Excerpt from his Project Syndicate article: The Pandemic’s Impact on China’s Growth Prospects:

It is safe to say that the fight against COVID-19 is far from over. For China, this means that more small-scale coronavirus outbreaks – with the associated economic disruptions – are all but inevitable. Given this, it is very likely that China’s total growth in 2021 will fall short of previous market expectations.

S&P 500 at record high, shrugs off Powell taper talk

Markets were mostly higher on Friday.

The S&P 500 rose 0.8 percent to a record high while the STOXX Europe 600 rose 0.4 percent.

Earlier in Asia, markets were mixed, with the Nikkei 225 down 0.4 percent but the Shanghai Composite up 0.6 percent.

US investors shrugged off remarks by Federal Reserve Chairman Jerome Powell on Friday at the Jackson Hole, Wyoming symposium that the Fed likely will begin cutting the amount of bonds it buys each month before the end of the year.

“The timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal regarding the timing of interest rate liftoff,” Powell added.

“Interest rate hikes are far, far away, and investors are happy about that,” said Michael Arone, chief investment strategist for the US SPDR Business at State Street Global Advisors. “The market seems well prepared for the start of tapering.”

S&P 500 falls amid taper talk

The S&P 500 snapped a five-day winning streak on Thursday, falling 0.5 percent.

The Federal Reserve's Jackson Hole symposium will be held on Friday but already, talk of tapering the Fed's bond purchases is sending jitters in markets.

Esther George, president of the Kansas City Fed, said on Thursday that “the level of accommodation we’re providing right now is probably not needed” and “I would be ready to talk about taper sooner rather than later”.

James Bullard, St Louis Fed president, said on Thursday: “I think we want to get going on taper. Get the taper finished by the end of the first quarter next year.”

Dallas Federal Reserve President Robert Kaplan said on Thursday: “It would continue to be my view that when we get to the September meeting, we would be well served to announce a plan for adjusting purchases and begin to execute that plan in October or shortly thereafter.”

S&P 500 hits record high, COVID-19 cases seen peaking

Markets were mostly little-changed on Wednesday.

The S&P 500 rose 0.2 percent to a record high while the STOXX Europe 600 was flat and Asian markets were mixed.

Analysts are optimistic on stocks.

Fundstrat’s Tom Lee said in a note to clients on Tuesday that “we are shifting further into full risk-on” while Wells Fargo Securities head of equity strategy Christopher Harvey lifted his year-end S&P 500 target to 4,825.

On the COVID-19 pandemic front, some optimism is creeping in again.

Lee noted an “apexing of COVID-19 cases in a number of states” in the US while Tapas Strickland, director of economics and markets at the National Australia Bank, wrote that “China’s delta outbreak also appears to be under control with two consecutive days of no new domestic cases”.

Elsewhere, though, the picture remains grim. COVID-19 cases continues to surge in Australia, with New South Wales in particular hitting another daily record of 1029 infections, while Japan's government has decided to extend its pandemic state of emergency to eight more regions.

Markets rise, COVID-19 cases “likely to roll over soon”

Markets rose on Tuesday, with the MSCI world equity index up 0.57 percent and the S&P 500 up 0.15 percent to hit another record high.

The Leuthold Group’s chief investment strategist Jim Paulsen thinks the stock market could see further gains.

Paulsen noted on Monday that Treasury yields are firming again, “suggesting the Covid variant here is likely to roll over soon and economic activity is likely to pick up”.

Others share similar views on a waning COVID-19 surge in the US.

“I thought there was an indication the South was peaking, and I think it’s pretty clear right now the South has peaked,” Dr Scott Gottlieb, the former Food and Drug Administration commissioner, told CNBC on Monday.

“The percent increases in cases and hospitalizations are declining each week, indicating progression towards a nationwide peak,” Chris Meekins, health policy research analyst at Raymond James, said in a note.

That would be good news for the US economy.

Aneta Markowska, chief financial economist at Jefferies, said that the latest surge is “really just causing a loss of momentum rather than pronounced economic weakness, and there is good chance that it will be pretty short-lived”.