DocuSign Falls, Omicron Worries Lingers, and is Inflation the Elephant in the Room?

Markets remained driven by Omicron variant-related news and its economic implications, as well as forecasts of faster tapering and earlier rate hikes.

The week saw the kind of volatility that day traders crave and when the dust settled, US stock indexes ended the week down with the Nasdaq hit the hardest, down close to 300 points or 1.92%.

During the week, the oil, industrials, real estate, and financials sectors had led a broad recovery bounce back from previous sessions with investors taking advantage of the drop to buy cyclical companies connected to the economic recovery. 

Initial jobless claims were fewer than expected at 222,000, while Friday's November jobs report saw 210,000 jobs added. Looking past the headline number which was lower than hoped, analysts took it as positive that the recovery from the depths of the pandemic was still on track. 

However, with mounting Omicron cases and a less lenient Fed, the picture is becoming increasingly bleak.

There are mixed forecasts for future inflation and US Treasury Notes rates maintained their gains from the previous sessions as some Fed members argued for speedier removal of policy support due to strong inflation. In Europe, Christine Lagarde of the European Central Bank President indicated inflation would fall in 2022.

OPEC+ responded to US political pressure and agreed to increase output however, until the M0 money supply changes, inflationary pressures will remain.