Markets catch their breath, omicron uncertainty, and oil regains some ground. Moving higher Global markets are recovering some composure aft
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Markets catch their breath, omicron uncertainty, and oil regains some ground. Moving higher Global markets are [recovering some composure]( after they were [sent into a tailspin]( on Friday by the emergence of the omicron Covid variant. While [U.S. futures are rising]( and Europeâs Stoxx 600 Index had gained 1% by 5:50 a.m. Eastern Time, the moves higher are still falling short of [recovering Fridayâs losses](. Overnight the MSCI Asia Pacific Index dropped 0.9% as investors in the region caught up with the selloff. The bond market is also seeing some reversal of the rush to safety with the 10-year Treasury yield rising to 1.529%. Gold was [back under $1,800 an ounce]( while Bitcoin rallied.Â
What is it? This morning the World Health Organization warned the [omicron variant]( could fuel further Covid-19 surges, which could have â[severe consequences](.â The comments come as uncertainty remains over [how severe]( the new variant is. What is clear is that governments around world are not waiting to find out with many already [imposing fresh travel restrictions](. It does appear, however, that those moves may already be too late with many countries reporting that the new strain [is already present in their populations](. On the positive side, vaccine manufacturers say a new shot could be ready [early next year]( while Bill Ackman said it would be bullish for equity markets if omicron turned out to be [mild to moderate](. Oil The first victim of the [crash in crude prices]( on Friday has been todayâs planned technical OPEC+ meeting. Itâs been [pushed to Wednesday]( to give delegates a chance to assess what the developments mean for their production schedule. The cartel is increasingly leaning towards [ditching plans to raise output]( at the meeting as the demand outlook worsens on travel restrictions and a possible [slowdown in global economic growth](. In the market this morning a barrel of West Texas Intermediate was [trading at $71.50](. Consumer check The Black Friday sales saw store traffic [surge 48%]( from last yearâs pandemic-hit level, while still remaining below 2019âs footfall. Online spending totaled $8.9 billion, which was towards the low end of expectations and below last yearâs total, according to a tally from the Adobe Digital Economy Index. That number is expected to be exceeded today as Cyber Monday sales are forecast to be between [$10.2 billion and $11.3 billion](. In Europe, there are continued signs that consumer confidence is waning as [inflation and the resurgence of the pandemic]( in the region take their toll. Coming up... U.S. pending home sales numbers for October are at 10:00 a.m. and Dallas Fed Manufacturing Activity for November is at 10:30 a.m. Fed Chair Jerome Powell is scheduled to make opening remarks at a New York Federal Reserve event. President Joe Biden has a busy day, speaking on the the omicron variant at 11:45 a.m., meeting with company CEOs on holiday shopping at 2:00 p.m. and delivering public remarks on his administrationâs work to strengthen the nationâs supply chains at 3:45 p.m. What we've been reading Here's what caught our eye over the weekend. - Odd Lots: Why [job openings are surging](, even with so many people out of work.Â
- [China cash]( flowed through Congo bank to former presidentâs cronies.Â
- Russia says U.S. is [forcing its diplomats out]( as tensions escalate.Â
- Macau casino stocks sink after police [arrest cityâs junket king](.Â
- El-Erian says the Fed should recognize [inflation isnât transitory](.
- Supreme Court justices will decide if abortion rights survive. [Hereâs where they stand](.
- AI discovers [over 300 unknown exoplanets]( in Kepler telescope data. And finally, hereâs what Joeâs interested in this morning Good morning. U.S. equity futures are in the green right now, but are still a long way away from erasing Friday losses, which were likely associated with anxiety about the new omicron strain of the virus. I say likely associated because true causation is difficult to know in markets. And[as my colleague Tracy Alloway noted]( in the 5 Things Asia newsletter ([sign up here](), markets were already doing weird things prior to Friday, with the VIX having started to rise, while hedge funds' favorite stocks got crushed. So markets may have been "ready" to some extent to dive. All that being said, we may be in for what could be a confusing period for markets. Here are a few things to consider: 1. Even prior to all the headlines about omicron, virus anxiety was probably picking up again. The case counts in Germany have been rising rapidly, [with hospitals facing strain](. Case counts in the U.S. have been rising as well. So at least on some level, that makes "normalization" more difficult. 2. That being said, the U.S. has shown extremely robust macro momentum lately. [The Atlanta Fed's GDP Tracker is at 8.6% real GDP growth for Q4](. Meanwhile, Citi's U.S. Economic Surprise Index (which measures the degree to which the data is beating or missing economists' expectations) has recently surged back into solidly positive territory. 3. On inflation, the renewed bout of virus anxiety is a mixed bag. [On the one hand, oil got clobbered Friday](. And it had already been weakening. So from a pure commodities standpoint, traders likely see the potential here for some global demand destruction, which would be disinflationary. On the other hand, one-way supply chain strains (and inflation) could start to ease if consumption were to re-normalize back towards services and away from goods. But so far that isn't happening. In fact lately it's been going in the other direction again as [this chart from the CEA]( shows. So to the extent that a component of the inflation story is about strains caused by this shift -- any renewed virus anxiety is likely to exacerbate that. As such, you can't just look at the oil plunge and conclude that a new wave is disinflationary per se. 4. One last thing. We're still in early stages of knowing about this strain. [Here's a great rundown]( from Lisa Du, Naomi Kresge, and Jason Gale about what we know so far. That being said, after the Friday selloff, it looks like a lot of people want to take the glass-half-full view here. For example, [here's Bill Ackman]( with a sentiment that's popular on Twitter right now. Follow Bloomberg's Joe Weisenthal on Twitter [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Follow Us Before itâs here, itâs on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals canât find anywhere else. [Learn more](. You received this message because you are subscribed to Bloomberg's Five Things - Americas newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox.
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