Shares tumble after Powell’s Taper comments – .

Shares tumble after Powell’s Taper comments – .

Stock prices were down around the world before Mr Powell’s testimony as investors struggled to understand the danger posed by the Omicron variant, which began to shake the markets last week. The Stoxx Europe 600 closed 0.9% lower; in Asia, the Nikkei 225 in Japan and the Hang Seng in Hong Kong each fell more than 1.5%.

Concerns about the variant’s potential economic damage, such as travel restrictions, once again hammered crude oil prices on Tuesday. Benchmark US crude futures prices have fallen more than 4% and are down about 20% since early November.

Taken at face value, such a sale implies that investors see increasing risks that the Omicron variant will trigger a global economic downturn. But some investors believe the prices are likely to reverse.

“Is there really a reason that oil is trading at $ 66 a barrel when we were north of $ 80?” Are we literally locking down the entire global economy? Said Jack Janasiewicz, portfolio manager at Natixis Investment Managers. “It’s an overreaction. “

Investors remain particularly attentive to the effectiveness of vaccines against it. The CEO of Moderna, a vaccine maker, said in an interview on Tuesday that there could be a “significant drop” in the effectiveness of current vaccines against the new variant. Executive Stéphane Bancel told the Financial Times that it could be months before a vaccine specific to Omicron could be produced on a large scale, and he added that it would be risky to move the set. of the company’s vaccine production while other variants are still prevalent.

Financial markets have been volatile since the identification of the Omicron variant in southern Africa late last week. The S&P 500 had its worst day since February on Friday, falling 2.3%. On Monday, it began to recover as politicians around the world warned of panic, but Tuesday’s fall more than wiped out those gains.

Despite the fluctuations of the past few days, investors continue to sit on solid gains this year. The S&P 500 is up more than 21% in 2021 – and that could be a reason for the selling to worsen next month, as investors try to preserve their gains for the year amid growing concerns about what awaits them.


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