Home > Weekly highlights: Omicron fears impact global stocks even as analysts see buy opportunities

Weekly highlights: Omicron fears impact global stocks even as analysts see buy opportunities

  • JPMorgan and Jim Cramer say the Omicron driven downturn gives investors a buy opportunity

  • In stock watch, Singapore-based Grab debuts on Nasdaq tanks 33% while Apple closes 0.4% lower after iPhone demand reports

  • In commodities, gold edges higher but faces another weekly slip while coffee prices touch 10-year highs

Wall Street edged higher on Thursday as investors appeared to shrug off this week’s Omicron Covid-19 variant triggered sell-off. The Dow closed 2% higher after adding nearly 620 points, while the S&P 500 and Nasdaq Composite also moved up, with 1.5% and 1% respectively.

JPMorgan, Jim Cramer say Omicron presents a buying opportunity

JPMorgan says Omicron presents a buy opportunity in the S&P 500. After tanking on Tuesday and Wednesday, the S&P 500 edged higher on Thursday as a rebound off lows of 4510 helped cut weekly losses from around 5% to around 3%. 

While this looks less alarming given the index is 22% in 2021, market observers say the fourth wave of Covid-19 in Europe and fears around Omicron could see it trade lower amid a broader stock market correction.

On Thursday, Jim Cramer said stocks were likely to face more pain before seeing a powerful Santa Claus rally from mid-December.

According to JPMorgan’s Marko Kolanovic, Omicron could accelerate the “pandemic's end”, catalysing capital “rotation from growth to value.” Analysts at the bank say it could also see a selloff in COVID and lockdown beneficiaries and rally in reopening themes," the analyst said in a note.

Grab (GRAB) shares slumps on Nasdaq debut

Shares of Grab, a Singapore-based ride-hailing firm, fell by 33% on Thursday, on the stock’s Wall Street debut. The stock nosedived from $13.06 at the opening, touched lows of $8.13 before paring some of the losses to close at $8.75. Pre-market trading has GRAB up nearly 5% at $9.05.

The “superapp” firm went public after this week after delaying its listing in July. Grab is a giant in Southeast Asia and its listing on the Nasdaq follows a massive $40 billion SPAC deal with Altimeter Growth Corp.

The stock’s debut on Nasdaq followed a landmark opening bell ceremony in Singapore.

Apple Inc stock

Shares of Apple Inc (NASDAQ: AAPL) slid nearly 3% on Thursday before paring the losses to close about 0.4% lower. The premier stock’s price slumped earlier on the day following reports that demand for the tech company’s iPhones had declined significantly during the current holiday season.

Jim Chanos bets against DraftKings and DoorDash

Kynikos Associates founder Jim Chanos says DraftKings and DoorDash are short-selling opportunities. According to the renowned short seller, sports betting firm DraftKings’ “business model is flawed,” with revenues outweighed by marketing costs.

He picks DoorDash, a food delivery app Chanos said had managed to lose money even during the sector’s pandemic boom.

Thursday saw DraftKings close 0.2% higher, while the DoorDash stock climbed to end the session 2.8% in the green.

Ark Invest’s Cathie Wood on Lucid and Rivian stocks

Ark Invest CEO Cathie Wood said on Wednesday that she could look at the stocks of electric vehicle makers Lucid and Rivian if the companies ventured into self-driving cars.

In an interview with CNBC, Wood noted that getting into the autonomous vehicle space would make the two stocks interesting. For Rivian, she noted that the firm’s collaboration with Amazon could be crucial.

Wood is highly respected among stock pickers, especially her spotting of Tesla before it rallied through the second half of 2020 and early this year.

In commodities

Gold prices are up on Friday, with spot gold gaining by 0.2% to $1771.34 per ounce at 0800 GMT, while gold futures are 0.5% up at $1772.45. It’s likely the precious metal could edge higher, but it might not recoup all the losses suffered this week.

This outlook follows the US Federal Reserve retaining its more hawkish view as market participants wait for more information during its mid-December meeting. Gold prices have declined 1% cumulatively this week as investors seek to benefit from yields in government bonds.  

Elsewhere, coffee prices soared to a 10-year peak of $2.48, taking year-to-date gains to over 80%. The price of the agricultural asset was at $2.34 on Friday, with dealers noting the possibility of further gains over the next two years.

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