Special post – market analysis #2
Part A: On 11/19 (attached) we covered the market situation and our point of view.
The market stalled and began a correction of almost 5% in the leading indices – as written in the review.
November closed in the red thanks to the last trading day of the month, and December even opened with declines.
In addition – the "fear index" VIX closed above 30 points for the first time in six months –
This is against the backdrop of several events: 1. The Omicron outbreak: the African variant, with the first patient diagnosed with the mutation in the US yesterday.
2. Moderna CEO's grim forecast that the new strain could harm vaccine efficacy.
3. Fed Chair Powell: was re-elected this week for another 4 years in his role and noted in his speech that inflationary pressure is not temporary and that the reduction of bond purchases, which helped the market, should be accelerated so that inflation begins to fade in the second half of 2022.
Unnecessary panic? President Biden said the variant is "a source of concern, but not panic".
And added: "The best protection against it are the vaccines" – at an opportune moment, Moderna announced that the booster against Omicron may be released this coming March.
Like the market – the world reacted with panic to the new strain, and global borders were closed to flights from South Africa, with European countries even entering lockdown due to EU restrictions.
Continuation and technical analysis in part B: