US stock index futures were trading mostly unchanged on Wednesday – the day after stocks showed a major increase due to a decrease in concerns about a new strain of Omicron. Dow futures fell 31 points, while S&P 500 futures remained unchanged. Nasdaq 100 futures rose 0.3%.
Yesterday, key indices showed their best days since March of this year: the Dow Jones Industrial Average rose by 492 points thanks to the growth of Apple, Salesforce, and American Express shares. The S&P 500 also showed growth, rising 2.1%, and the Nasdaq Composite index showed excellent results after rising more than 3%.
After investors got acquainted with some new developments related to the action of the Omicron strain, the pressure on stock indices subsided, and the demand for risky assets increased significantly. According to preliminary data, the strain only slightly reduces the number of antibodies produced by Pfizer and BioNTech vaccines, so there is a possibility that the first versions of the vaccine will counteract the virus. Even though omicron is more contagious than the first two strains, its symptoms are milder and do not lead to serious consequences. Pfizer also stated that 3 doses of the vaccine completely neutralize the contagious effects of the new strain of coronavirus.
However, some nervousness persists. Today, the German authorities announced that they have recorded the largest number of deaths from COVID-19 since February of this year. The Government may strengthen measures to combat the spread of the pandemic if the situation does not stabilize in the near future. In total, 69,601 new cases of infection were registered, which is 2,415 more than in the same period a week ago. 527 people died – the maximum number since February 12, bringing the total number to 104,047, the German Robert Koch Institute for Disease Control reported.
Meanwhile, JPMorgan believes that investors can trust the recent recovery of the stock market. When the news about Omicron hit the feed, there was a sharp reaction. Now, according to JPMorgan, the demand from institutional investors is returning. The markets very quickly recouped the fall not even on very important news – this preserves the prerequisites for further growth.
At the same time, according to Goldman Sachs CEO David Solomon, investors should not expect the bullish growth of stocks and other assets to continue from current levels at a larger pace. According to him, the S&P 500 index has been showing double-digit returns for three years thanks in part to the extraordinary support provided by the Federal Reserve and other central banks at the beginning of the coronavirus pandemic. This boom has spread to other assets, including real estate, art, and cryptocurrency. "We do not expect that the yield on stocks and other assets will remain at the level that has been observed over the past couple of years," Solomon said in an interview.
The head of Goldman also noted that having recovered from the turmoil last year, Goldman's shares are still relatively undervalued. This year, the securities have already grown by 48%.
It is expected that today the Bureau of Labor Statistics will publish an October survey of vacancies and staff turnover. Economists forecast that there were 10.6 million open vacancies in October, compared with 10.4 million in September. However, this report is unlikely to significantly affect the market direction.
Let's take a look at the premarket and talk about the news:
The decline was noted in the shares of Moderna, which fell by 2.8% in the premarket. This was due to a decrease in concern about the new strain. Earlier, when it was detected, the securities jumped by more than 10%.
Apple shares rose 0.8% despite a report that iPhone production is expected to fall by 15 million units - below its target of 230 million units this year due to supply chain problems.
As for the technical picture of the S&P 500
Now traders are aiming for a breakthrough of a fairly large level of $ 4,718, which will open the way to fresh highs in the area of $ 4,750 and $ 4,770. In case of renewed pressure on the market today, the nearest support is seen in the area of $ 4,654, and larger levels for purchases will be in the area of $ 4,599 and $ 4,551.
