Preliminary data from studies into the Omicron strain of Covid-19 suggested it may be a less potent version of previous variants of the Coronavirus, help global market rise. In a quiet and shortened week due to the Christmas holiday, markets were still digesting the recent increase in hawkishness from central banks. The mini-Santa rally lifted the S&P 500 up to flirt with a record high.
The blue-chip FTSE 100 index was up 1.7% over the week on Friday morning, with the more UK-focused FTSE 250 gaining 2.4%
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US chip giant Intel apologised for asking its suppliers to avoid sourcing goods from the controversial Chinese province of Xinjiang.
Omicron variant of Covid-19 continues to spread and new measures introduced to control its reinfection rate, hitting market sentiment. Daily reported cases of Covid-19 infections passed 100,000 for the first time since the pandemic began. However, studies on the severity of the Omicron strain, although preliminary, provided some scope for optimism.
Early research suggested the Omicron variant may cause milder illness than the Delta variant of Covid-19, although it appears to be spreading more rapidly. These included:
- An analysis by Imperial College London suggested Omicron's mutations had resulted in a milder virus than Delta. It concluded that there is a 25% to 30% lower risk of visiting A&E with Omicron and about a 40% reduction in needing to stay in hospital for more than a day compared with previous Covid-19 waves.
- A study in Scotland tracking the number of people ending up in hospital. It noted that, if Omicron behaved the same as Delta, they would expect about 47 people to have been admitted to hospital at this stage. There were just 15.
- South African researchers said people were 70-80% less likely to need hospital treatment with Omicron infections compared with other known variants. However, there was no difference in outcomes for the few patients that ended up in hospital.
Germany, France, the Netherlands, Malaysia, Singapore and South Korea, amongst numerous other countries, reimposed partial or full lockdowns, border controls or other social-distancing measures. Numerous cities and states in the US also introduced new rules – and US President Joe Biden announced additional federal vaccination and testing sites, with 500 million free home-testing kits available to Americans from January.
Thirteen million people in the Chinese city of Xi'an were put under strict “stay-at-home” orders after just 217 cases, as the country’s zero-case strategy is tested – six weeks before the Winter Olympics is due to start in Beijing.
Mr Johnson said the situation remained extremely difficult and the government might need to act after the festive perio
Prime Minister Boris Johnson ruled out introducing new Covid-19 restrictions in England before Christmas, as did Prime Minister Scott Morrison in Australia. However, restrictions were tightened in Scotland, with Hogmanay events cancelled, and Wales, which will reintroduce the "rule of six" in hospitality venues. Mr Johnson said the situation remained extremely difficult and the government might need to act after the festive period – with decisions on any new social-distancing measures being driven by data.
Chancellor Rishi Sunak unveiled a £1bn fund to help businesses, including the leisure and hospitality sector. Businesses such as pubs and restaurants will be able to apply for cash grants of up to £6,000 per premises. He also pledged an extra £30m to help theatres and museums.
“The great reboot” as workers get back behind their desks following the pandemic suffered, to the benefit of working from home. Apple and Google told workers that they are delaying deadlines for staff to return to the office indefinitely. US banking giant Wells Fargo also abandoned its 10 January deadline “given the changing external environment". This is a trend happening at other companies.
UK car production in November hit its lowest level since 1984 as supply chains remain disrupted. Output fell by 28.7% to 75,756 units year-on-year, marking the fifth consecutive month of decline, according to trade body the Society of Motor Manufacturers and Traders.
Joe Biden said measures to tackle global supply-chain issues have averted a pre-Christmas crisis. Ahead of a meeting with his Supply Chain Disruptions Task Force and corporate executives, the US President said shop shelves were stocked at 90% of their full capacity.
The UK economy was already slowing down before Omicron hit, with growth data from the Office for National Statistics, revised down. The second reading of data from between July and September showed the economy grew by 1.1%, rather than 1.3%, in the period before the new variant emerged. It blamed weaker consumer spending, and the fallout from energy companies going out of business.
America enters 2022 faced with stubbornly-high inflation, sky-high spending and activity slowing as variants of Covid-19 spread. What lies in store for the US economy – and President Biden next year.
The US strategy of cutting the flow of finance from the west to Chinese companies appears to be working. China Mobile, the world's largest mobile network operator, announced a plan to raise up to $8.8bn when it lists its shares in Shanghai. The company was delisted from the New York Stock Exchange due to rules imposed by Donald Trump. China Mobile's smaller rivals – China Telecom and China Unicom – have already moved their listing to Chinese exchanges.
Russian President Vladimir Putin said that there was no room to retreat in the political standoff with the US.
US chip giant Intel apologised for asking its suppliers to avoid sourcing goods from the Chinese province of Xinjiang, the mostly Muslim region where the ruling Communist Party is accused of running “re-education camps”. The reference to Xinjiang in a letter to suppliers was aimed at complying with US regulations, Intel said on its social-media account. Indeed, on Thursday, President Biden signed into law legislation that bans imports from Xinjiang over concerns about forced labour.
China continued its crackdown on the technology sector – and the flaunting of affluence – after e-commerce livestreamer Viya (real name Huang Wei) was fined by the tax bureau in the city of Hangzhou, for hiding personal income and other offences from online activities in 2019 and 2020. Other Chinese provincial authorities followed suit and posted identical demands that celebrities and livestreamers report any tax-related crime before 2022 and ensure any error is corrected.
There was no sign of tensions easing at the Europe’s border with Ukraine. Russian President Vladimir Putin said that there was no room to retreat in the political standoff with the US – and would be forced into a tough response unless America’s “aggressive line” was dropped.
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