Fearing an economic downturn related to a slower-than-expected vaccine program in the United States and Europe, the New York Stock Exchange ended its worst week since late October on Friday. Also, the surge of speculation gripping the community of short-sellers is starting to raise concerns of a more general destabilization of the markets in which bubbles have emerged in some segments in recent months. After early findings were found to be mixed for Phase 3 of the Covid-19 vaccine trial, Johnson and Johnson’s stock lost 3.5 percent. Conversely, after predicting more than 89 percent of the efficacy of the vaccine candidate, Novavax soared by almost 65 percent.
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The Dow Jones gave up -2.03 percent to 29,982 points at the close, while the larger S&P 500 index sank -1.9 percent to 3,714 points, and the Nasdaq Composite, heavy in electronics and biotech companies, plunged -2 percent to 13,070 points.
All three indices lost 3.2%, 3.3 percent, and 3.5 percent, respectively, during the week. The month of January, which had begun with much fanfare in the expectation of beating the Covid-19 by vaccination, eventually ended with a decrease of 2% for the DJIA, 1.1% for the S&P 500, and 1.7% for the Nasdaq.
On Friday, macro statistics revealed that in December, for the second consecutive month, Americans remained wary about spending. Though sales rose sharply (up 0.6 percent on a month-on-month basis, compared to 0.1 percent consensus and -1.3 percent in November), after -0.7 percent in November, personal spending dropped by 0.2 percent. This decline, however, was less than the majority feared (-0.5 percent). It should be noticed that in December, the ‘central PCE’ price index increased by 0.3 percent relative to the previous month, versus a consensus of 0.1 percent.
Furthermore, for January, the University of Michigan’s final consumer confidence index came in at 79, just below consensus (79.2).
