Opening Bell: Futures, Stocks Rebound On Fading Omicron Worries; Oil, Gold Rise

Key Events

After Friday's sharp selloff, US futures on the Dow, S&P, NASDAQ and Russell 2000 as well as European shares rebounded in trading on Monday as investors decided markets had overreacted to concerns that the latest COVID-19 variant, Omicron, will weigh on the recent global economic recovery.

The price of gold rallied and oil pushed past $70 again.

Global Financial Affairs

All four US equity futures were trading in the green as the trading week opened, with contracts on the NASDAQ 100 jumping 1.20% at the time of writing, setting itself apart as today's clear leader.

The tech-heavy index's outperformance may be a sign that traders are still concerned about the new coronavirus strain, otherwise would they not have preferred to bid up value stocks on Dow and Russell 2000 contracts? After all, value shares tend to do better when an economy accelerates.

Rather, this morning, investors bought into the technology sector, which typically outperforms during periods of risk-off and was the darling of the pandemic. Does this mean there's an expection of a return to lockdowns? The answer isn't clear.

Indeed, travel and energy firms led an advance of more than 1% for the STOXX 600 Index, paring a 3.7% drop on Friday—the worst slide for the pan-European index since June, coupled with the highest volatility in almost ten months.

After the South African doctor behind the discovery of Omicron said that symptoms were "extremely mild," stocks in Asia stabilized.

Japan's Nikkei 225 plunged 1.63%, underperforming the region. China's Shanghai Composite closed nearly flat, recovering from a 1.06% loss.

If future medical reports show that the new coronavirus strain is not as bad as originally thought on Friday and the Chinese index recovers, it could complete an H&S bottom.

Treasury yields on the 10-year note were little changed. It's unclear whether the Fed's plan for interest rate hikes will change following the discovery of the new COVID variant but it is a concern.

Yields managed to hold above an uptrend line since early August, keeping a reversal at bay.

The dollar found its footing after almost three days of gains were wiped out last week.

Gold opened higher and extended an advance towards $1,800. The yellow metal is now benefiting from its status as a safe-haven play. 

The price of the yellow metal bounced off the bottom of a rising channel.

Bitcoin continued to baffle traders, whipsawing between gains and losses. The wild price swings continue to present opportunities for traders. 

The cryptocurrency is developing an intraday shooting star on the exact price level of the Oct. 28 low, meeting with the top of its falling channel. We expect the digital token to retest the $53,000 lows and the uptrend line before determining a trajectory.

Oil opened above $71, a near 5% jump, after plunging 12% on Friday on fears that any new coronavirus lockdowns would hurt demand.

The price opened precisely on the uptrend line since Nov. 2.

Up Ahead

• Fed Chair Jerome Powell and Treasury Secretary Janet Yellen testify in the US Senate on Tuesday and Wednesday.
• On Tuesday, Eurozone CPI figures are released
• Canada publishes GDP figures on Tuesday. 

Market Moves

Stocks

• The STOXX 600 rose 0.6%
• Futures on the S&P 500 rose 0.6%
• Futures on the NASDAQ 100 rose 0.9%
• Futures on the Dow Jones Industrial Average rose 0.3%
• The MSCI Asia Pacific Index fell 0.9%
• The MSCI Emerging Markets Index fell 0.4%

Currencies

• The Dollar Index rose 0.1%
• The euro fell 0.22% to $1.1293
• The Japanese yen was little changed at 113.35 per dollar
• The offshore yuan fell 0.14% to 6.3885 per dollar
• The British pound was up 0.12% at $1.3356

Bonds

• The yield on 10-year Treasuries advanced five basis points to 1.52%
• Germany's 10-year yield increased one basis point to -0.32%
• Britain's 10-year yield rose three basis points to 0.85%

Commodities

• WTI crude is up 4.75% at $71.20 a barrel.
• Brent crude rose 4.8% to $76.23 a barrel
• Spot gold fell 0.3% to $1,797.01 an ounce