Maybe the robots that sold stocks on Friday were still right?

Amir Kahanovitz Chief Economist, Phoenix-Excellence

30/11/2021

The President Both He said yesterday that there was a “cause for concern but not panic” and that “… the US will not need Saturdays or closures this winter.” but This morning there are already fears that Biden will be forced to break his promise, after the modern president said in an interview with the Financial Times that the new variant will probably actually be relatively resistant to vaccines And it will take several months for the vaccines to be adapted to it. Maybe the robots that sold stocks on Friday were still right?

Get out of shock – Goldman Sachs investment bank economists argued yesterday that Lorient Omicron “could have significant growth effects”, but the results could be so broad and varied that they prefer to simply do nothing: “We do not make Omicron – related changes in our growth, inflation and monetary policy until The scenarios will become a little clearer. ” I mean, if a lot of people behave like them then maybe the market doesn’t actually embody enough even a “concern premium”?

The bond market does not forgive so quickly – Yesterday we saw how fast the stock market knows how to forgive and forget when needed, something that can not be said about the bond market that left low yields into yesterday’s stock recovery. Does he embody that Powell will carry a battle shock with him? Fed Powell and Secretary of the Treasury, Yellen, before the Congressional Committee. Powell reacted for the first time to the outbreak of the Omicron variant and from the reaction one can learn about the helplessness he is in when on the one hand the Corona variant is scary and on the other hand a plan to get out of the Corona crisis. He chose to justify the dissonance with “symmetrical uncertainty”, both in the labor market and in inflation. But if you think about it, this is not true, then it is quite likely that at least in the first stage in the scenario of a really deadly virus there will be downward uncertainty (inflation driven by falling energy prices and labor market led by leisure industries). It is also quite likely that car manufacturers will not repeat the mistake of reducing production and a large part of the inflation generators at exit locksmiths will not occur again. It was also noted that Powell did not mention in the testimony document the plan to reduce the rate of bond purchases. Is he trying to forget about it?

In the background, indications that disruptions that contributed to temporary inflation are starting to work out – Temporary inflation in the world has been going on for a long time and many have given up on continuing to call it temporary and waited for the central banks to admit it and raise interest rates as well. But stop the horses! There are growing indications that the disruptions and bottlenecks are being resolved. After months of shrinking production in China, largely due to power outages, this morning a survey of purchasing managers at manufacturing companies there surprised when it returned to describing expansion. In addition, the bottleneck in maritime transport continues to be known to open consistently and the prices of maritime transport from China continue to fall (in moderation). The car segment is also surprisingly good indications: Adam Patterson, CEO of the Australian branch of the carmaker Nissan, known as part of the tripartite alliance of Nissan-Mitsubishi-Renault, the world’s largest passenger carmaker, said yesterday in an interview with the car website “Drive” that The company estimates that its supply will strengthen significantly in the first quarter of 2022 and that it will return to normal inventory levels in the showrooms as early as the second quarter.. “The expectation is that we will return to a bit of normalcy at this point.” In the background, energy prices are also cooling, including coal, gas and oil, and will also reduce price pressure.

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