Welcome to the weekly market update from Signature Wealth Management. I’m Brian Ransom, Research Director from Signature Wealth and here’s what happened in the market this week.
Entering the month of December, the market experienced a 4% sell off on news surrounding the Omicron variant. Investors seemed eager to buy the dip and the market bounced back to all-time highs, based on positive news on the new variant.
There were two major news items this week. First, Pfizer announced that their booster shot data showed neutralization of the Omicron variant but simultaneously showed a large reduction of immunization with the two initial shots. Then this morning, the Bureau of Labor Statistics announced a new increase in inflation on a year-over-year basis of 6.8%, annualized.
Results from an antibody neutralization test at Pfizer show a significant reduction of antibody neutralization with the Omicron variant shown in purple here. The Pfizer vaccine was significantly more effective against the Alpha and Beta variant. However, the good news is the booster shot demonstrates fairly equal effectiveness across all known variants including the Omicron variant. Evidence on the ground also indicates that the new variant shows lower-than-expected virulence associated with infection. This implies that we can effectively immunize against the variant and the severity of disease seems significantly reduced. The market responded positively to this news.
On the inflation front, the Consumer Price Index increased for the second month in a row to 6.8%. Certain core items like food also saw a fairly significant increase implying that the most recent increases in consume prices are now associated with products included in the Sticky CPI index. Meaning that it looks like some of these price increases are here to stay.
For more information on this topic or a variety of other topics including market updates, financial planning, and wealth management please like, subscribe, and follow. I’ll be taking the rest of December off so happy early new year everyone!
1.FactSet Research Systems. (n.d.). S&P 500 (Interactive Charts). Retrieved December 10, 2021, from FactSet Database.
2.Pfizer. “Pfizer and Biontech provide update on omicron variant.” Published December 8, 2021 at https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-provide-update-omicron-variant
3.Bureau of Labor Statisitics. “12-month percentage change, Consumer Price Index, selected categories (past 20 years),” Updated December 10, 2021. Retrieved from https://www.bls.gov/charts/consumer-price-index/consumer-price-index-by-category-line-chart.htm
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