(Bloomberg) — U.S. stocks pared gains as investors evaluated the resilience of the global recovery amid a record spike in coronavirus cases.
The S&P 500 was little changed, following the benchmark’s 69th record close this year on Monday. The tech-heavy Nasdaq 100 slipped. The U.S. 10-year Treasury yield dipped and the dollar edged higher while oil jumped to a one-month peak.
A tidal wave of omicron infections took global Covid-19 cases to a daily all-time high on Monday. The surge has disrupted global reopening and could squeeze hospitals. At the same time, investors are taking comfort from studies suggesting omicron, while highly contagious, causes less severe illness. A University of Oxford immunologist said the omicron variant is not “the same disease we were seeing a year ago,” reinforcing reports about the strain’s milder nature.
“What we’re seeing with each of these variants is they’re just not as severe,” said Anderson Lafontant, Miracle Mile Advisors senior advisor on Bloomberg TV. “One area that we like a lot is energy. We’re viewing this as a reopening play.”
Read more: Big S&P 500 Bull Case Lives On in Unwavering Profit Forecasts
Global shares are on course for a third year of double-digit returns, powered by the U.S. surge. Analysts remain bullish on earnings forecasts even amid coronavirus waves and a shift by some key central banks toward tighter monetary policy to fight high inflation. Concerns remain that those variables could spur heightened volatility.
Data Tuesday showed the Richmond Fed’s manufacturing survey rose in December, beating estimates, with the prior reading revised higher, while growth in U.S. home prices cooled for a third straight month in October.
“Massive liquidity, negative real yields, and earnings growth” support the bull case for stocks, Patrick Armstrong, Plurimi Wealth’s chief investment officer, said on Bloomberg TV. “While those pillars remain in place, I think equities do move higher.”
In cryptocurrencies, Bitcoin gave up a recent advance to slide below the $50,000 level, suggesting investors in the riskiest corners of global markets are becoming more circumspect.
What to watch this week:
- U.S. initial jobless claims, Thursday
For more market analysis, read our MLIV blog.
Some of the main moves in markets:
Stocks
- The S&P 500 was little changed as of 11:30 a.m. New York time
- The Nasdaq 100 fell 0.2%
- The Dow Jones Industrial Average rose 0.4%
- The Stoxx Europe 600 rose 0.6%
- The MSCI World index rose 0.2%
Currencies
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1319
- The British pound was little changed at $1.3433
- The Japanese yen rose 0.1% to 114.72 per dollar
Bonds
- The yield on 10-year Treasuries declined two basis points to 1.46%
- Germany’s 10-year yield was little changed at -0.24%
Commodities
- West Texas Intermediate crude rose 0.6% to $76.05 a barrel
- Gold futures were little changed
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