First The Fed And Now Congress: Economic Stimulus Is Drying Up And Some Investors Appear Concerned

The S&P 500 Index futures (/ES) traded about 2% lower in premarket trading on Monday on rising Omicron COVID-19 cases but trimmed some of those losses to about 1.11%. Many stores and restaurants In New York and New Jersey are shutting down. Other countries are imposing stronger restrictions like the Netherlands which re-imposed a lockdown of all nonessential shops, bars, and restaurants closed until mid-January.

COVID-19 vaccine maker Moderna MRNA +0% announced that its third vaccine dose was effective against the Omicron variant. The stock was trading 7.28% higher in premarket trading.

Oil futures (/CL) also fell 4.69% down below $70 on Omicron fears. Winter already tends to see lower demand for crude because fewer people in the Northern Hemisphere travel during winter months despite the holiday season. Omicron could cut demand even further if holiday travel plans are canceled.

Falling oil prices have pulled Chevron CVX +0% 1.77% lower in premarket trading. The stock is one of the stocks that was weighing down the Dow Jones Industrial Average futures (/YM) 1.23% before the open.

The Build Back Better bill received another blow over the weekend that could have investors concerned about a lack of stimulus spending. Senator Joe Manchin (D., WV) told reporters that he wouldn’t support the bill because of concerns that it would add to the already growing inflation problem in the United States. According to the Wall Street Journal, the loss of Mr. Manchin’s vote will likely doom the $2 trillion dollar bill. With the Fed tapering its stimulus plans and the inability to get the spending bill passed, investors appeared to be concerned about the economy.

The news around Omicron and the failure of the Build Back Better bill appear to have increased the degree of uncertainty that investors are feeling. The Cboe Market Volatility Index or VIX) jumped more than 20% before the open and traded around the 26 levels. However, the 10-year Treasury yield (TNX) is only slightly lower and appears to be holding at a long-term support level. This may suggest that bond investors aren’t as nervous as stock investors about the weekend’s developments.

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