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US market weekly: S&P 500 ends lower amid new covid variant and mixed macroeconomic signals.

US market weekly: S&P 500 ends lower amid new covid variant and mixed macroeconomic signals.

Last updated: 27 Nov, 2021 | 10:58 am

US market weekly: S&P 500 ends lower amid new covid variant and mixed macroeconomic signals.

U.S. stock markets closed mixed on Monday to start the Thanksgiving week. All three major stock indexes jumped in early hours of trading  following the news of Jerome Powell’s renomination as Fed Chairman. However, indexes gave up their gains in the last hour after a spike in government bond yields fearing heightened inflation. 

Stocks were mixed on Tuesday with technology stocks under further pressure, as investors further examined the market implications of Federal Reserve Jerome Powell’s renomination to lead the central bank. The Dow and the S&P 500 ended in positive territory while the Nasdaq Composite finished in red following a rise in government bond yields.

The S&P 500 and Nasdaq gained on Wednesday as technology stocks recovered some recent losses and weekly jobless claims reached a 52-year low. However, personal consumption expenditures (PCE) accelerated to rise by 5.0% in Oct, the fastest rate since 1990, to add to recent signs of elevated price pressures. 

U.S. stock markets were closed on Thursday on the account of Thanksgiving.

U.S. stocks plunged on Friday, with global markets rattled by a new covid variant discovered in South Africa, which fanned concerns that new lockdowns could be imposed if the variant spreads widely. Trading volumes were low due to the Thanksgiving holiday in the U.S., which further increased the volatility. Major benchmarks fell sharply with the Dow diving by more than 900 points logging its worst day of the year and its third worst Thanksgiving selloff ever. Meanwhile, S&P 500 sank by over 2%, its biggest drop since February. For the week, S&P 500 ended -2.2% lower and Dow Jones -2% lower. 

Weekly market stats with IND

Let’s see the major developments during the week:

New coronavirus variant: Stocks declined for the holiday-shortened week after Friday’s news about the emergence of a new, potentially more contagious, coronavirus variant in South Africa triggered a sharp sell-off in equities.The spread of the existing delta variant appears to have again picked up though economic progress is coming back on track. 

An average of 87,195 coronavirus cases have been reported each day in the United States while the total cases have crossed the 47.8 million mark. However, to battle this, the pace of vaccination has also picked up. About 59% of the eligible American population are fully vaccinated and over 70% have received the first dose.

Macroeconomic Data: President Joe Biden plans to renominate Jerome Powell as Federal Reserve chair. Powell was widely viewed as somewhat less dovish than Lael Brainard, a Fed governor who was the other leading candidate for the position. Biden nominated Brainard to be the vice chair of the Fed’s Board of Governors. 

Investors considered new Labor Department data showing weekly initial jobless claims fell far more than expected to their lowest level since November 1969, underscoring current tight labor market conditions. Personal consumption expenditures (PCE) accelerated to rise by 5.0% in Oct, the fastest rate since 1990, to add to recent signs of elevated price pressures. 

Oil market: President Biden also formally announced that the U.S. will release oil from the Strategic Petroleum Reserve to try to pressure gasoline prices, which are a key part of headline consumer price inflation figures, lower. However, the price of West Texas Intermediate crude oil, the U.S. benchmark for the commodity, plummeted more than 10% on Friday on fears that the new variant will damage demand for oil.