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Cyber Monday to Determine Holiday Sales Fate

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Market indexes are buying back somewhat following Friday’s scare on news that a new, highly contagious variant of Covid-19 has been discovered. That variant, now labeled Omicron (the 15th letter in the Greek alphabet, suggesting there have been over a dozen mutations of the coronavirus since it was first discovered two years ago), helped take market indexes down -2% to -3% on Black Friday, with Bitcoin tumbling to their lowest levels since September.

Pre-market futures this morning are buoyant, indicating market participants may have overreacted to the Friday news (which, thankfully, was only a half-day of trading for Thanksgiving Weekend). At this hour, the Dow is +275 points, the S&P 500 is +40 and the Nasdaq is +180 points. As for Bitcoin, it is trading +4% at this hour.

It’s a relatively orderly ebb-and-flow, as far as global pandemics go. This buy-in on cheaper prices on recently very expensive equities and cryptos is exactly how markets run best. Does it mean investors know that this won’t usher in a new global shutdown? Of course not; however, a wide availability of vaccines and anti-virals to counter the effects of Omicron are likely to keep the worst aspects of Covid at bay. That’s where the money is being placed this morning.

Today is also Cyber Monday — which, considering consumers’ potential skittishness with presenting themselves in large indoor crowds such as department stores on Black Friday, may actually be a boon for e-tailers today. This is not to say earlier concerns over supply chains and subsequent higher pricing won’t be hitting Amazon (AMZN - Free Report)  and other companies today, but we will keep a close eye on Cyber Monday sales in comparison to last year and 2019 to see if holiday shopping season is off to a strong start, Omicron or no Omicron.

No economic data is scheduled for release until after the opening bell. At that time, we expect Pending Home Sales for October to rebound to a positive +0.7% from the -2.3% posted in September. Tomorrow will bring us other housing formation data, by way of the latest Case-Shiller Home Price Index, albeit for the month of September.

This is also Jobs Week, with both private-sector payrolls for November announced Wednesday by Automatic Data Processing (ADP - Free Report)  and nonfarm payrolls on Friday from the U.S. Bureau of Labor Statistics (BLS). The ADP number is expected to tick down from October’s very strong 571K, while the BLS number is expected to bump up to 581K — 50K higher than reported last month.

Of course, all these things do not yet assess how this latest variant of Covid-19 will hit the economy, both globally and here at home. Pfizer (PFE - Free Report)  CEO Albert Bourla this morning expressed confidence on CNBC’s “Squawk Box” that mutations of the coronavirus have been considered all along, and that the pharma giant is well-prepared to take on what threatens to be a fresh world-wide wave of Covid-19 via Omicron. In short, careful optimism rules the early morning.


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