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.”