Sun. Nov 28th, 2021

Optimism is still being held back by concerns about inflation, which have risen this year due to an increase in demand.

Asian markets were mixed on Monday as long-standing concerns over inflation compensated economic data from the United States and China, while tourism-linked firms built up optimism about global reopening after Pfizer said its pill to treat COVID-19 was highly effective.

Wall Street’s three main indices broke records last week after figures showed more than half a million new U.S. jobs were created last month, with appointments recovering as new infections fall across the country. Figures for the previous two months have also been adjusted upwards.

The news provided fresh evidence that the world’s top economy is well on the road to recovery, as life is slowly returning to some extent normal.

But optimism is still being held back by worries about inflation, which has risen this year due to rising demand, rising energy prices and the supply chain snoring – forcing central banks around the world to start wiping out their massive pandemic – era support measures.

“Inflation is currently the biggest wind up front,” Dana D’Auria, at Envestnet, told Bloomberg Television.

US President Joe Biden’s $ 1.2 trillion infrastructure package has raised concerns about inflation [File: Evelyn Hockstein/Reuters]

Contributing to inflation expectations is Joe Biden’s $ 1.2 trillion infrastructure bill that finally passed through Congress on Friday, giving the president a much-needed boost in his plan to implement major spending measures to support the economy.

However, another proposal to raise another $ 1.9 trillion for social and environmental programs remains diminished.

The U.S. labor report was followed on Sunday by China, which said exports rose 27.1 percent in October as factories let goods flow out despite power outages in recent months caused by emissions reduction targets, the rising price of coal and supply problems.

Traders are watching Beijing as the Communist Party holds a crucial meeting this week that is likely to see leader Xi Jinping strengthen his grip on power as he seeks to tighten government control over the economy.

Xi’s quest for “common prosperity” to redistribute wealth has led governments to suppress a range of industries – particularly technology firms – that have plagued markets in recent months.

Tourism-focused companies rose after Pfizer said on Friday that a clinical trial with its pill to treat COVID-19 showed it was 89 percent effective, adding that it was a big step out of the pandemic to come. Pfizer’s is the second anti-COVID pill after that of Merck.

Scott GottliebPfizer councilor Scott Gottlieb predicts that the pandemic in the US could be over by January [File: Eduardo Munoz/Reuters]

Meanwhile, Pfizer board member and former head of the Food and Drug Administration Scott Gottlieb told CNBC’s Squawk Box that the pandemic in the US could be over by January.

The news about the treatment has raised hopes that more countries will soon be able to reopen to foreign travelers, which has boosted airlines.

Increase in demand

China Airlines and Air China piled up more than 10 percent each, while Japan Airlines and Hong Kong’s Cathay Pacific rose by about 5 percent.

Macau-based casinos also enjoyed strong purchases with Sands China rising 9 percent, with MGM China and Galaxy Entertainment more than 6 percent more.

Oil extended Friday’s rally after OPEC and other major producers refused to heed Biden’s calls last week to increase production to meet an increase in demand, while US officials consider some of the country’s strategic supplies release to temper gasoline prices.

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