Although yesterday can be considered a day of pause with little volatility in the market in general, the underlying sentiment of investors in the stock market remains somewhat more optimistic, encouraged by more positive news that highlight the effectiveness of the vaccines to protect against the Omicron virus.
Pfizer and BioNTech said Wednesday that preliminary results showed that their Covid-19 vaccine neutralized the Omicron variant of the virus after three doses. The Pfizer chief executive also said he would present the full results of his Covid-19 symptom drug Paxlovid to the US Food and Drug Administration within the first few days of next week.
The market is more inclined towards this positive news and seems to ignore the mobility restriction measures that, despite the reasonable expectations from pharmaceutical companies, are being upheld in much of Europe.
Due to the increase in cases in China, production centers and ports could reignite the supply problems and the inflationary spikes with it. The CPI data in the United States this Friday will be relevant in this regard.
Adding to that, the escalation of geopolitical tension in Russia and China could affect the supply levels. In this sense, a Pentagon official has stated that it will be necessary to urgently reinforce the self-defense groups in Taiwan as a deterrence strategy. He says that China's coercive air and sea campaigns around Taiwan increase the probability of miscalculations.
Tensions in Taiwan continue, and although they remain in the background for the moment, we must pay attention to the repercussions they may have on the markets.
Meanwhile, the North American indices closed without changes or slight gains, decoupling from the European indices, which seem to be more sensitive to the potential pandemic risks and the negative growth forecasts derived from the restrictive measures.
The German DAX index lost 0.75% after two days of upward correction. Technically it has managed to overcome the 100 and 200-day moving averages and close a previous bearish gap in a movement that can be considered simply as a corrective to the bearish momentum that started in mid-November.
Oil continues its upward correction encouraged by this better sentiment and by the talks between Iran and the United States. Their potential resolution could change the trend of this raw material drastically.
The uncertainty about the evolution of global oil demand for next year is another factor to take into account given the forecasts of an economic slowdown and the possible negative effects of the restrictive circulation measures that are already being implemented in much of the world.
Technically it has surpassed the 200-day moving average and is approaching the 100-day moving average, but it is still in a downtrend with this latest movement of a purely corrective nature.
Sources: Bloomberg, Reuters