Optimism continues to be dampened by worries about inflation, which has jumped this year due to a pickup in demand.
Asian markets were mixed on Monday, as long-standing inflation concerns offset anti-forecast economic data from the United States and China, as tourism-related companies rallied in optimism over the global reopening after Pfizer said its pill to treat COVID-19 was very effective.
All three of Wall Street’s major indexes set record highs last week after figures showed more than half a million new U.S. jobs were created last month, with hiring rebounding as new infections are dropping across the country. The figures for the previous two months have also been revised upwards.
The news provided further evidence that the world’s largest economy is well on its way to recovery as life slowly returns to a semblance of normalcy.
But optimism continues to be dampened by worries about inflation, which has risen this year amid a pickup in demand, surging energy prices and grunts from the chain. supply – forcing central banks around the world to start rolling back their massive pandemic – backing measures at the time.
“Inflation is the biggest headwind right now,” Dana D’Auria, of Investnet, told Bloomberg Television.
Joe Biden’s $ 1.2 trillion infrastructure bill that was finally passed by Congress on Friday adds to inflation expectations, giving the president a much needed boost in his plan to push through broad spending measures to support the economy.
However, another proposal to shell out an additional $ 1.9 trillion for social and environmental programs continues to languish.
The U.S. jobs report was followed on Sunday by China saying exports climbed 27.1% better than expected in October, as factories kept the flow of goods going despite power outages in recent months caused by emission reduction targets, soaring coal prices and supply. problems.
Traders are watching Beijing as the Communist Party holds a crucial meeting this week that is expected to see leader Xi Jinping strengthen his grip on power as he seeks to strengthen government control over the economy.
Xi’s “common prosperity” drive to redistribute wealth has seen authorities crack down on a number of industries – especially tech companies – that have rocked markets in recent months.
Tourism-focused businesses rose after Pfizer said on Friday that a clinical trial of its pill to treat COVID-19 showed it to be 89% effective, adding that it was a large not towards the end of the pandemic. Pfizer is the second anti-COVID pill after Merck’s.
Meanwhile, Scott Gottlieb, a member of the Pfizer board of directors and former head of the Food and Drug Administration, told CNBC’s Squawk Box that the pandemic could be over in the United States by January.
The news about the treatment has heightened hopes that more countries may soon reopen to foreign travelers, causing airlines to skyrocket.
China Airlines and Air China each accumulated more than 10%, while Hong Kong’s Japan Airlines and Cathay Pacific rose around 5%.
Macau-based casinos also benefited from large buys with Sands China up 9%, with MGM China and Galaxy Entertainment up more than 6%.
Oil extended Friday’s rally after OPEC and other major producers refused to respond to Biden’s calls last week to increase production to meet increased demand, while U.S. officials plan to release some of the country’s strategic supplies to moderate oil prices.