Markets “In a Nutshell” for December 6, 2021
Investment Week at a Glance
Stocks finished lower for the week. The Dow Jones Industrial Average fell 0.90%, the S&P 500 was down 1.20%, and the NASDAQ fell 2.60%. Foreign stocks (MSCI EAFE) were also down, falling 0.10%. Bond prices were higher for the week, with the 10-year U.S. Treasury ending the week at 1.35%. (Data source: Wall Street Journal)
Omicron Worry
The market is still trying to price in the Omicron variant of Covid-19 and how it may affect business around the World which has increased volatility. In each of the last 6 trading days, we have had 1% moves in either direction. Many countries have once again put in travel restrictions as we continue to learn more about the Omicron variant. Many expect that we will not know the full story on this variant for the next couple of weeks and that will continue to lead to more volatility as we learn more each day. Once the complete impact of Omicron is realized, markets should calm down as they will then know what is expected as far as travel and business around the World.
Economy Backdrop
Although there is uncertainty around how this new variant will impact business, the economy of the United States is strong and continuing to improve. We also are much more advanced medically to control this variant compared to where we were in March of 2020. Due to this, lockdowns and restrictions within the United States are almost out of the question and currently are not a real worry. The market has also proven that it will look past these spikes in cases because the economy is continuing to grow through the pandemic. Consumers also have an estimated $2.3 trillion in excess savings compared to before the pandemic. This will allow the consumer to continue to spend and help the economy grow overall. Another positive for the economy is the current unemployment continues to decline as it now sits at 4.2% and is now within 1% of the pre-pandemic number.
Quiz:
Quiz
What was the pre-pandemic unemployment rate? (Scroll Down for Answer)
Answer below.
Have a Great Week!
Answer:
2) 3.5% in February, 2020 the unemployment rate in the United States was near all-time low levels