Optimism continues to be dampened by concerns about inflation, which have risen sharply this year due to increased demand.
Asian markets were mixed on Monday as long-standing inflation concerns offset forecast economic data from the United States and China, while tourism-related companies were optimistic about the global reopening after Pfizer said its pill was used to treat COVID-19 is very effective.
Wall Street’s three main indexes hit records last week after numbers showed more than half a million new U.S. jobs were created in the past month, with attitudes rebounding as new infections across the country receded. The figures for the last two months have also been revised upwards.
The news provided new evidence that the world’s leading economies are on a good recovery path as life slowly returns to a semblance of normalcy.
However, optimism continues to be dampened by concerns over inflation, which has soared this year due to surging demand, a surge in energy prices, and supply chain confusion – forcing central banks around the world to reverse their massive pandemic. Support measures of the era.
“Inflation is the biggest headwind right now,” Envestnet’s Dana D’Auria told Bloomberg Television.
US President Joe Biden’s $ 1.2 trillion infrastructure package has fueled inflation concerns [File: Evelyn Hockstein/Reuters]
Contributing to inflation expectations is Joe Biden’s $ 1.2 trillion infrastructure bill, which finally passed through Congress on Friday and gives the president a much-needed boost to his plan to push through large-scale spending measures to support the economy.
Another proposal to allocate an additional $ 1.9 trillion to social and environmental programs remains, however.
The U.S. labor market report was followed on Sunday by China, which said exports rose by a better-than-expected 27.1 percent in October as factories, despite power outages in recent months caused by emissions reduction targets, rising coal prices and supply, problems maintained the flow of goods.
Traders keep an eye on Beijing as the Communist Party holds a crucial meeting this week at which Leader Xi Jinping is likely to consolidate his power as he seeks to tighten government control over the economy.
Xi’s drive for “shared prosperity” to redistribute wealth has led authorities to crackdown on a number of industries – technology companies in particular – that have rocked markets in recent months.
Businesses focused on tourism rose after Pfizer said Friday that a clinical study of its pill used to treat COVID-19 showed it was 89 percent effective, adding that it was a big step to overcome the pandemic. Pfizers is the second anti-COVID pill after that from Merck.
Pfizer board member Scott Gottlieb has predicted the U.S. pandemic could be over by January [File: Eduardo Munoz/Reuters]
Meanwhile, Scott Gottlieb, Pfizer board member and former head of the Food and Drug Administration, told CNBC’s Squawk Box that the U.S. pandemic could be over by January.
The news of the treatment raised hopes that more countries could soon be opened to foreign travelers, which propelled airlines up.
China Airlines and Air China each gained more than 10 percent, while J -an Airlines and Cathay Pacific from Hong Kong gained around 5 percent.
Macau-based casinos also enjoyed strong buying, with Sands China gaining 9 percent while MGM China and Galaxy Entertainment gaining more than 6 percent.
Oil extended the rally on Friday after OPEC and other major producers refused last week to follow Biden’s calls to increase production to meet spike in demand while US officials consider releasing some of the country’s strategic supplies, to curb gasoline prices.