Stocks in the U.S. were in positive territory mid-week following Tuesday’s strong rebound. For the week, the S&P 500 is up about 0.60%, while the MSCI EAFE (international index) was lower by about 0.25%. After seeing an upwardly revised third quarter GDP report this morning, investors are looking for clarity on the economic impact of the COVID-19 Omicron variant and the outlook for U.S. fiscal stimulus. COVID-19 cases continue to increase dramatically as we finish the year with the seven-day moving average for new COVID-19 cases now up to 150,000, significantly higher than the 70,000-level seen at the beginning of November. The Biden administration expects to take delivery of four million courses of COVID-19 treatments by the end of January, according to officials familiar with the matter. The Food and Drug Administration is poised to authorize a pair of pills from Pfizer Inc. and Merck & Co. as soon as this week. In Washington, focus remains on the $2 trillion Build Back Better plan after President Biden stated that there is still a possibility that he can strike a deal to enact the stimulus bill. Later this week we will get data on consumer confidence and existing home sales, followed by new home sales, durable goods, initial claims, and personal income and outlays on Thursday. The highlight will be the personal income data, which includes the Fed’s preferred measure of inflation, the personal consumption expenditure (PCE). Core PCE is expected to increase 4.5% on an annualized basis. In bonds, Treasuries declined this week with the yield on the benchmark 10-year note moving higher to around 1.47% mid-week.
Source: GSAM, Daily Upside, JPM, Factor Investor
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