Optimism remains dampened by concerns about inflation, which has soared this year due to a pick-up in demand.
Asian markets were mixed on Monday, as long-term concerns about inflation offset economic data from the United States and China, while tourism-related companies rebounded from optimism about the global reopening after Pfizer said its pill to treat COVID-19 was very effective.
Wall Street’s top three indexes set records last week after figures showed more than half a million new jobs were created in the United States last month, and hiring rebounded as new infections fell across the country. . The figures for the previous two months were also revised upwards.
The news provided new evidence that the world’s leading economy is well on the way to recovery as life slowly returns to something close to normal.
But optimism continues to be held back by concerns about inflation, which has skyrocketed this year due to a rebound in demand, a spike in energy prices and supply chain tangles, forcing central banks around the world to start rolling back their massive pandemic. support measures of the era.
“Inflation is the main headwind right now,” Envestnet’s Dana D’Auria told Bloomberg Television.
Adding 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 push for big spending measures. to support the economy.
Yet another proposal to invest another $ 1.9 trillion in social and environmental programs continues to languish.
The US jobs report was followed on Sunday by China saying that exports had soared 27.1 percent better than expected in October as factories maintained the flow of goods despite cuts. of energy in recent months caused by emission reduction targets, the increase in the price of coal and supply. problems.
Traders are keeping an eye on Beijing as the Communist Party holds a pivotal meeting this week in which leader Xi Jinping is likely to tighten his grip on power as he seeks to tighten the government’s grip on the economy.
Xi’s “common prosperity” push to redistribute wealth has seen authorities clamp down on a variety of industries, particularly technology companies, which have rocked markets in recent months.
Tourism-focused businesses surged after Pfizer said Friday that a clinical trial of its COVID-19 pill had shown it to be 89 percent effective, adding that it was a big step out of the pandemic. . Pfizer’s is the second anti-COVID pill after Merck’s.
Meanwhile, Pfizer board member and former Food and Drug Administration chief Scott Gottlieb told CNBC’s Squawk Box that the pandemic could end in the United States in January.
News of the treatment raised hopes that more countries could soon reopen to foreign travelers, sending airlines skyrocketing.
China Airlines and Air China amassed more than 10 percent each, while Japan Airlines and Hong Kong’s Cathay Pacific rose about 5 percent.
Macau-based casinos also enjoyed strong buying with Sands China skyrocketing 9 percent, with MGM China and Galaxy Entertainment more than 6 percent.
Oil extended Friday’s rally after OPEC and other major producers declined to listen to calls from Biden last week to increase production to meet a surge in demand, while US officials are considering releasing some of the oil. strategic supplies of the country to moderate gasoline prices.