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The outlook for the US economy is still clouded by the emergence of Omicron strain, this may see the US’s renewed lockdown which would benefit the Swiss franc and other safe havens.
Optimism is struggling to find its way through uncertainty ahead to global financial markets until Thursday’s session closing. Traders are eying US employment data scheduled for Friday which will ultimately influence Fed’s steps to taper and effect interest rate hikes.
Shares rose, with the S&P 500 and Dow Jones more than recouping Wednesday’s losses as of late afternoon. All 11 sectors of the S&P 500 were up, with all but one rising at least 1%.
Oil prices and treasury yields rose while investors are confronting rising inflation are now also evaluating the probability that Omicron could spur changes in government or monetary policy, which has led to volatility in recent sessions.
Economic Data
The run of good news on the labor market was extended by a separate report on Thursday from global outplacement firm Challenger, Gray & Christmas showing job cuts announced by U.S.-based employers dropped 34.8% in November to 14,875, the fewest since May 1993. So far this year, there have been 302,918 job cuts, down 86% compared to the same period in 2020.
But worker shortages are hindering faster job growth. The Federal Reserve’s Beige Book on Wednesday described employment growth ranging from “modest to strong” with contacts noting “persistent difficulty in hiring and retaining employees.”
Other Developments
Investors and traders are eying the improvement of employment data. Moreover, There is a movement back into risk assets, but more importantly Fed speakers reinforced the faster taper message. The market is reading the said message that a faster taper improves the prevalent conditions.
Federal Reserve Bank of Atlanta President Raphael Bostic told the Reuters Next conference on Thursday it would be appropriate to end the tapering of the central bank’s bond-buying program by the end of the first quarter of 2022. San Francisco Fed President Mary Daly said it might be time to start crafting a plan for raising interest rates to address above-target inflation.
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