In November, the stock exchanges had two clearly differentiated stages. During the first weeks, after a very positive US earnings campaign and the start of the seasonally bullish period, Wall Street managed to set new all-time highs. However, in the last days of the month, the appearance of the omicron variant of COVID-19 completely eliminated all the registered promotions. Central Banks were prominent protagonists in November.
– The tone looser than expected from the BC of Australia and the United Kingdom was surprised. Regarding the latter, the market discounted a rate hike that finally did not occur.
– For his part, Lagarde stated literally that it was almost impossible for the ECB to raise interest rates in 2022.
– The Fed confirmed the Tapering schedule. It will start at the end of November, will end in mid-2022 and will imply a reduction in monthly purchases of 15,000 million.
– Biden renewed Powell as governor of the Fed for a new term of 4 years, something that did not sit well with the bond market that experienced declines after hearing the news.
The risk of stagflation continues to be one of the main concerns of investors. Known macro data continues to contract while inflation rebounds to high levels. The North American data stood out, with a price index growing at + 6.20% year-on-year, well above forecasts. You have to go back to 1990 to find such a high level of inflation. In the middle of the month, the COVID situation in Europe worsened significantly. Germany and Austria stand out, where the escalation of infections reached alarming levels. Austria announced the total confinement for 20 days and the obligation to vaccinate the entire population.
In the session corresponding to Friday, November 26, the discovery of a new variant of COVID was announced. It has 32 mutations compared to the original virus (twice that of the Delta variant). The fear that this level of mutations will make current vaccines not work, sank the markets on that day. Helping the falls was the fact that Wall Street was at half gas for the Thanksgiving holiday.
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