New Covid strain sparks fright in markets — hither's how to invest now
Stephanie Link, Hightower chief investment strategist and portfolio manager, and David Rosenberg, Rosenberg Research chief economist and president, join ‘Power Lunch’ to discuss buying opportunities in today’s market. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi
Stocks bounced on Monday, next Friday’s big sell-off, after President Joe Biden said economical lockdowns in response to the omicron Covid variant are currently off the table.
The Dow Jones Industrial Average gained 236.6 points to 35,135.94. The S&P 500 added 1.3% to 4,655.27, and the tech-focused Nasdaq Composite rose 1.9% to 15,782.83. The small-cap benchmark Russell 2000, total of the most economically sensitive stocks, fell 0.2% to 2,241.98.
“If people are vaccinated and wear their masks, there’s no need for lockdowns,” Biden said at a press conference Monday. Biden also said there would be no new travel restrictions.
Stocks were coming off a holiday-shortened session Friday in which the Dow posted its worst day since October 2020. The Dow dropped 905 points, or 2.5%. The S&P 500 tumbled 2.3%, and the Nasdaq Composite slipped 2.2%.
“There are still more questions than answers regarding the omicron variant, but after what happened on Friday, the bounce today is a welcome sign,” said Ryan Detrick of LPL Financial. “We’ve seen other variants cause some indigestion, but after a little bit of time things were able to calm downward and move forrad. We’re optimistic that will be the playbook once again.”
Mega-cap technology names emerged as the winners Monday. Tesla popped 5.1%, Microsoft gained 2.1%, and Amazon advanced 1.6%. Apple popped 2.2%. However, Twitter shares fell 2.7% on news that CEO Jack Dorsey is stepping downward as chief of the social media company.
Travel-related stocks posted a slight rebound after a choppy session. United Airlines rose 0.7%, Royal Caribbean gained 2.8%, and TJX Companies popped 1.9%.
“We would be aggressive buyers of this pullback,” wrote Fundstrat’s Tom Lee in a note to clients Sunday night. “As with the case for Beta and Delta variants, the ‘bark’ has proven worse than the bite in each of those precedent instances. The market carnage, in our view, will be short-lived and transitory.”
Merck was the largest drag on the Dow, dropping 5.4%, after Citi downgraded the stock to neutral from buy, saying in a note to clients that evolution struggles for the company’s HIV drug were taking a bite out of Merck’s long-term potential.
The World wellness Organization on Friday labeled the omicron strain a “variant of concern.” While scientists continue to research the variant, omicron’s large number of mutations has raised alarm. Preliminary evidence suggests the strain has an increased risk of reinfection, according to the WHO. The variant was first off reported to the WHO by South Africa and has been found in the U.K., Israel, Belgium, the Netherlands, Germany, Italy, Australia and Hong Kong, but not yet in the U.S. Many countries, including the U.S., moved to restrict travel from southern Africa.
The South African Dr. who first off raised the alarm over the new variant told the BBC that patients had “extremely mild” symptoms though it was too early to determine how omicron behaves before it is studied closely.
“While it is too early to take hold definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible,” Bill Ackman of Pershing Square Capital Management tweeted Sunday even. “If this turns out to be true, this is bullish not bearish for markets.”
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast
Connect with CNBC News Online
acquire the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
https://www.cnbc.com/select/best-credit-cards/
#CNBC
#CNBCTV