COVID-19 is back on top of the agenda as investors fear that the new Omicron variant could stall the global economic recovery from the nearly two-year pandemic.
Here are the top picks to watch in this week’s markets.
1. Uncertainty rise amid new variant
While little is yet known about the new omicron covid variant first detected in South Africa, Wall Street’s three primary indices tumbled on Friday as they re-opened after Thursday’s Thanksgiving.
Scientists raised concerns that omicron might be vaccine-resistant and more easily transmissible than the Delta variant due to its high number of mutations.
Previously, investors had been upbeat about economic recovery amid broad vaccine availability and advances in treatments, despite fears over steadily rising inflation.
2. Oil price plunges
On Friday, Oil prices witnessed their greatest one-day decline since April 2020, plunging $10 a barrel. The dive occurred as news of the new Omicron variant saw countries rushing to enforce new travel restrictions adding to oversupply in the first quarter.
PVM analyst Tamas Varga said that OPEC’s (The Organization of the Petroleum Exporting Countries and its allies) initial assessment to release a stockpile of 400,000 barrels per day and the sudden appearance of a new covid variant raises serious concern about economic growth and the oil balance in the coming months.
3. Meta stock potential in 2022
The metaverse remains a red-hot space as investors of all colors jump on anything metaverse-related. The crypto and NFT space have also adopted the metaverse as its next vertical, and Meta’s size and ability to scale into this space are thus noteworthy.
Free cash flow for Meta is currently around $9.5 billion after the company reported Q3 revenue results up 33%, a record for Meta.
This makes for a rather attractive valuation multiple and makes the stock bullish when investors look at free cash flow metrics and consider a long-term perspective.
4. Bitcoin remains the favorite crypto
On Friday, PlanB in Bitcoin tweeted a skyrocketing price of $98k in 4 days, bringing the crypto world back on its feet. Moreover, the king of crypto assets continually performs aggressively in the crypto space with a market cap of over $2.5 trillion.
Bitcoin traded bullish on Saturday of over $55k with a growth rate of +200% in the past 12 months. The market capitalization of over $1 trillion makes the cryptocurrency a firm favorite among global investors and enables Bitcoin to be the number one crypto asset.
5. Tesla fourth-quarter earnings outlook
In a recent email, Tesla CEO Elon Musk warned employees not to spend irresponsibly in the final weeks of the year as he aims to minimize the cost of fourth-quarter deliveries.
Breaking the pattern of big end-of-quarter deliveries could cause unwanted stock volatility when fourth-quarter deliveries are reported early next year while investors are looking for big numbers and earnings.
Tesla stock is up about 53% year to date, coming into Monday trading, better than the 22% and 14% comparable.
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