Market Snapshot: U.S. stock futures point to more gains on hopes omicron won’t derail economies

What’s driving the market?

The Dow industrials have rallied over 1,100 points in the last two sessions, as investors have cheered up and hunted for bargains in the wake of selling after the new omicron variant in South Africa was announced in late November.

“In theory, such strong gains are sign of instability and should be taken with caution, however the good news is that the volatility is easing, and the VIX index dropped 20% yesterday, meaning that the latest fears could slowly begin fading,” said Ipek Ozkardeskaya, senior analyst at Swissquote in a note to clients.

Read: After a brief omicron scare, the Dow is now poised for the best start to a December in 24 years. Here’s what history says happens next.

Stock index futures jumped early Wednesday after Pfizer and BionTech reported results from an “initial laboratory study” showing their COVID-19 vaccine neutralized the omicron variant of the coronavirus after three doses — the full two-dose regimen plus a booster shot. 

Prior to Pfizer’s announcement, a small study from South African scientists showed that the variant may partially evade vaccines, but vaccinations should still defend against more serious disease. Those doubly vaccinated with a previous COVID infection showed greater resistance to the variant, raising hopes that boosters may keep people safer, the study showed.

GlaxoSmithKline’s
UK:GSK

GSK
assessment that its antibody treatment also appears to work against omicron, cheered investors on Tuesday.

But elsewhere, there were reports of a “stealth” omicron offshoot that was more difficult to identify via standard PCR tests, with Australia’s Queensland government confirming one case, and others found in South Africa and Canada.

Also lifting markets lately is the perception that the Federal Reserve’s more hawkish tilt has been digested and priced in, said Ozkardeskaya, but the analyst and others remain wary.

“While the buy-everything trade will have its day in the sun for the rest of this week, some serious non-virus risk points are looming,” Jeffrey Halley, senior market analyst at OANDA, told clients in a note. “Friday sees US CPI [consumer price inflation] and a print at or above 7.0% is going to raise the heat at next week’s FOMC.”

The cost of living jumped 0.9% in October and rose 6.2% on an annual basis, the highest rate since November 1990.

Economists polled by Dow Jones Newswires and The Wall Street Journal are forecasting CPI to rise 0.7% for November and 6.7% annually. That data comes ahead of Wednesday’s JOLTS job openings for October, which are expected to rise to 10.6 million from 10.4 million.

What companies are in focus?

• Shares of Chinese social-media company Weibo Corp.
  WB
  fell 7.2% in their Hong Kong trading debut. U.S.-listed shares were down 2%.

• Stock in Stitch Fix
  SFIX
  slumped 23% in premarket trading after the company, which sells clothing through subscriptions and more, issued disappointing guidance.

How are other assets trading?

• The yield on the 10-year Treasury note 
  BX:TMUBMUSD10Y
  fell 1 point to

• to 1.47% Tuesday. Treasury yields and prices move in opposite directions.

• The ICE U.S. Dollar Index 
  DXY,
   a measure of the currency against a half-dozen other monetary units, was down just under 0.1%.

• In oil futures, West Texas Intermediate crude CL00 for January delivery
  CLF22
   rose 0.1% to $72.12 a barrel.

• Gold futures 
  GC00
  for February delivery
  GCG22
   was unchanged at $1,784.90 an ounce.

• The Stoxx Europe 600 Index 
  XX:SXXP
  slipped 0.1%, while London’s FTSE 100 Index 
  UK:UKX
  rose 0.1%.

• In Asia, the Shanghai Composite Index
  CN:SHCOMP
  closed 1.1% higher, while the Hang Seng Index 
  HK:HSI
  was flat in Hong Kong and China’s CSI 300 
  XX:000300
  advanced 1.5%. Japan’s Nikkei 225 Index 
  JP:NIK
  rose 1.4%.