Crypto Capital

By Jeffrey Cane |  Wednesday, December 8

Three-peat. The Covid-relief rally showed today that it had legs, with stocks recovering from a late morning retreat to end near their highest levels for a three-day winning streak.  

The market's focus has now swiveled away from worries over the Omicron variant and back to its old favorites: the Federal Reserve, whose policy makers meet next Tuesday and Wednesday, the outlook for inflation (November consumer prices will be reported on Friday), and the prospects for economic growth.   

The confidence among investors that came earlier from anecdotal evidence that Omicron might cause milder cases of Covid-19  was bolstered this morning when Pfizer and BioNTech said that three doses of their vaccine were effective against the variant.  One sign of a relative calm returning to the market: the Cboe Market Index, or VIX, has fallen more than 33%, to under 20, over the last five sessions. 

The S&P 500 closed up 0.3% today. Its three-day gain of 3.6% is the index's best since early November 2020. The S&P 500 is now just a little more than three points away from its record close of Nov. 18. The Dow Jones Industrial Average rose 0.1% today, the Nasdaq Composite added 0.6%, and the Russell 2000 advanced 0.8%.

Travel-related stocks were the big winners today: Norwegian Cruise Line Holdings (up 8.2%), Carnival (up 5.5%), Royal Caribbean Group (up 5.2%), Las Vegas Sands (up 4.4%), and United Airlines Holdings (up 4.2%).

Growth stocks also did well: Apple rose 2.3%, Meta Platforms (Facebook) gained 2.4%. 

The three-day streak of most importance may have been in Treasuries, where the yield on the 10-year climbed above 1.5%, to 1.508% -- its highest level since Nov. 29.

“What we are starting to see is a degree of migration away from a forced positioning in the wake of Omicron’s initial reporting plus month-end, and we are in this shoulder period between that phenomenon and a really important signal from the Fed on Wednesday,” Eric Freedman, chief investment officer at U.S. Bank Wealth Management, told Reuters. 

Elsewhere, Cathie Wood's new exchange-traded fund, the ARK Transparency ETF (ticker: CTRU), ended 0.5% higher on its first day of trading, according to FactSet.  It is Wood's second new ETF this year, and it tracks "an index of the 100 most transparent companies measured by things like how companies disclose information in corporate documents and whether they have been involved in lawsuits," according to Barron's Evie Liu.

Crude oil for January delivery rose 0.4%, to $72.36 a barrel, after a weekly report showed that U.S. oil inventories declined less than expected. Gold was little changed, at $1,783.40 an ounce. Bitcoin traded slightly higher at $50,634 this afternoon.

The U.S. dollar slipped against several major currencies. The British pound was weaker after the U.K. government said that it would recommend that people in England work from home and require people to wear face masks in most indoor venues in an effort to stop the spread of the Omicron variant.