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Fed Chair Jerome Powell believes that the omicron variant of Covid-19 and a recent rise in coronavirus cases pose a threat to the U.S. economy.
Worries over the new variant could “reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions,” he said in prepared remarks.
Treasury Secretary Janet Yellen will join Powell on Tuesday in testifying before the Senate Banking Committee on Tuesday.

Federal Reserve Chairman Jerome Powell believes that the omicron variant of Covid-19 and a recent uptick in coronavirus cases pose a threat to the U.S. economy and muddle an already-uncertain inflation outlook.
“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” Powell said in remarks he plans to deliver to Senate lawmakers on Tuesday. “Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.”

Treasury Secretary Janet Yellen will join Powell on Tuesday in testifying before the Senate Banking Committee. The Fed chief and Treasury secretary are required to report to Congress each calendar quarter as part of the March 2020 economic-relief legislation that magnified the central bank’s emergency lending programs.
Powell’s remarkets were released by the central bank on Monday evening.
The Fed chief also offered more direct comments on inflation, saying that it’s challenging to forecast the persistence and impact of supply constraints, but that it now appears that “factors pushing inflation upward will linger well into next year.”
He noted that many forecasters, including some at the Fed, predict that inflation will move down “significantly” over the next year as bulked-up supply chains overtake cooling demand for goods.

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Powell’s remarks came just days after fears over a new Covid variant drove investors to ditch U.S. stocks and push back their expectations for future Fed rate hikes. The Dow Jones Industrial Average dropped 900 points, or 2.5%, on Friday and clinched its worst session of year on the week’s final day of trading. Markets rebounded some on Monday.

Concerns about the spread and potential impact of the omicron coronavirus variant caused traders on Friday to flock to the relative safety of Treasury bonds and reduce their forecast for future Fed rate hikes.
Last week, about 25% of investors said they thought the Fed would still have interest rates near zero in June 2022, with the other 75% betting the central would have hiked at least once by then, according to the CME Group’s FedWatch tool. That spread has since narrowed thanks in part to the new variant, with some 35% of investors now betting the Fed will still have rates near zero in June 2022.
The yield on the benchmark 10-year Treasury note fell 15 basis points on Friday to 1.49% before bouncing back above 1.5% on Monday. Bond yields fall as their prices rise.

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Stock futures climbed in overnight trading on Monday following a rebound on Wall Street as investors reassessed risks associated with the new omicron Covid variant.
Futures on the Dow Jones Industrial Average gained 110 points. S&P 500 futures and Nasdaq 100 futures both rose 0.3%.

The overnight action came after a broad-based comeback that saw the S&P 500 jump 1.3% with all 11 sectors registering gains. Major averages rose to session highs on Monday after President Joe Biden said economic lockdowns are currently off the table and there will be no new travel restrictions. The blue-chip Dow ended the day up more than 200 points.
“We stay invested for now as a new virus strain and European COVID surge are hurting risk sentiment,” Jean Boivin, head of BlackRock Investment Institute, said in a note Monday. “Any delay of the powerful restart now means more later.”
The new Covid variant, first detected in South Africa, has now been found in more than a dozen countries, causing many to restrict travel. The World Health Organization labeled the omicron strain a “variant of concern” on Friday when the Dow slid 900 points to suffer its worst day since October 2020.

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Covid symptoms linked to the omicron variant have been described as “extremely mild” by the South African doctor who first raised the alarm over the new strain. Still, the WHO said it will take weeks to understand how the variant may affect diagnostics, therapeutics and vaccines.
Federal Reserve Chairman Jerome Powell believes that the omicron variant poses a threat to the central bank’s mandate to achieve stable prices and maximum employment, he said in remarks he plans to deliver to Senate lawmakers on Tuesday.

The CBOE volatility index, also known as the VIX or Wall Street’s fear gauge, declined during Monday’s rally but still remained above 22. The gauge spiked 10 points above 28 at one point on Friday.
“This week will be instructive to see if the buy-the-dip approach by investors is still in play, or if markets are vulnerable to a more significant pullback,” said Mark Hackett, chief of investment research at Nationwide.

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Twitter CEO and co-founder Jack Dorsey gestures while interacting with students at the Indian Institute of Technology (IIT) in New Delhi on November 12, 2018.
Prakash Singh | AFP | Getty Images

Check out the companies making headlines in midday trading Monday:
Moderna — Moderna shares surged 11.8% after CEO Stephane Bancel said Monday it will take months to distribute a Covid vaccine specifically targeting the omicron variant, but a higher 100-microgram dose of the booster shot could be ready “right away.” Bancel said it will take at least two weeks to study how the new variant’s mutations impact the efficacy of current vaccines.

Twitter — Shares of the social media company fell 2.7% after news that CEO Jack Dorsey is stepping down, effective immediately. Parag Agrawal, the company’s chief technology officer, will take over as chief executive. Dorsey was serving as both the CEO of Twitter and Square, his digital payments company. He will remain a member of the board until his term expires in 2022.
Merck — Shares of the pharmaceutical giant slid 5.3% after Citi downgraded Merck to neutral from buy. Citi said in a note to clients that disappointing data from two key drugs for Merck in recent weeks hurt its long-term earnings potential.
Ebay — The e-commerce giant lost more than 2% after announcing it’s acquiring Sneaker Con Digital, the sneaker authentication business of the marketplace Sneaker Con. Ebay said the deal furthers its expansion strategy in sneakers and will give customers added confidence in their high-value item purchases. The companies signed and closed the deal on Nov. 24. Terms of the deal were not disclosed.
Bristol-Myers Squibb — Shares of the pharmaceutical company fell 3.3% even after the company announced its application for a psoriasis-treating drug called deucravacitinib was accepted by the Food and Drug Administration and European regulators validated its application.
Allbirds — The eco-friendly shoe stock dropped 4.7% after a mixed batch of initiations from Wall Street banks. Morgan Stanley and JPMorgan initiated coverage of Allbirds with neutral-equivalent ratings, citing concerns about the company’s long-term growth potential.

Tesla — Shares of the electric vehicle maker rose 5% on news that CEO Elon Musk urged employees to prioritize “minimizing cost of deliveries” over expediting deliveries of cars to customers in order to hit end-of-quarter goals. Tesla is also closer to starting production at its first European factory in Germany, according to German auto news site Automobilwoche.
Coinbase — The cryptocurrency exchange’s shares rose 5.3% as the price of bitcoin rebounded following a sell-off with the broader equities market on Friday. Other crypto-related equities got a lift too, with Microstrategy rising 4.9% and Silvergate Bank adding 5.8%.
Zoom Video —  Shares of the video-conferencing fell less than a percent, paring back deeper losses from earlier in the day, as some of Friday’s enthusiasm for the stay-at-home stocks cooled. Shares of the company rose nearly 6% in the prior session, as the omicron Covid-19 variant sparked investors to rotate into areas of the market that benefit when consumers are at home.
 — CNBC’s Jesse Pound, Pippa Stevens, Yun Li and Hannah Miao contributed reporting

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The price of bitcoin surged back above $57,000 in morning trade, rising as high as $57,373, according to Coin Metrics data.
Other digital currencies also rose, with ether jumping more than 5% to $4,321 and XRP up over 4% at around 97 cents.
Bitcoin last week sank to its lowest level since early Octobe, amid a broader sell-off, on fears over the new coronavirus variant.

The value of Bitcoin (BTC) has exceeded the threshold of 66,895 dollars for the first time in his history.
Chesnot | Getty Images

Bitcoin and other cryptocurrencies climbed Monday after a sharp sell-off at the end of last week.
The price of bitcoin surged back above $57,000 in morning trade, rising as high as $57,373, according to Coin Metrics data. It pared gains later in the day, last trading at around $57,038, up 5% in the last 24 hours.

Other digital assets also rose, with ether jumping more than 5% to $4,321 and XRP up over 4% at around 97 cents.
Vijay Ayyar, head of Asia Pacific at cryptocurrency exchange Luno, said early reports that the new, heavily-mutated omicron Covid variant came with milder symptoms was giving the market a boost.
“We’re seeing news of the variant being potentially weaker in terms of symptoms in early analysis, which has bolstered the market comeback,” Ayyar said via email. “Hence, smart investors have probably bought this dip.”
Bitcoin last week sank as low as $53,549, its lowest level since early October, amid a broader sell-off in stocks and other riskier assets on the back of fears over the new coronavirus variant.
The world’s largest digital currency was briefly down more than 20% from its recent all-time high of nearly $69,000, officially entering bear market territory. Bear markets are typically defined by a decline of 20% of more from recent highs.

The new Covid variant, first identified in South Africa, has spread to multiple countries including the U.K., Germany and Italy.
The U.S., U.K. and other nations have restricted travel with some African countries in response. Britain has also introduced new measures to tackle the new virus mutation, including mandatory mask wearing in shops and public transport in England.
On Sunday, Dr. Angelique Coetzee, the South African doctor who first spotted the omicron variant, described its symptoms as “extremely mild,” soothing fears of a potential return of lockdown restrictions during the holidays.
“The global environment did add to the uncertainty across all risk asset classes as we saw last week, but the bounce back always shows us how strong the uptrend is, which is what we’re seeing here,” Ayyar said.
If bitcoin loses $48,000 to $50,000 on a daily or weekly basis, “that would definitely imply bearishness,” he added. But for now, Ayyar says “we’re still in bull market territory.”

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Check out the companies making headlines in premarket trading.
Moderna — Shares of the vaccine maker continued their rally, jumping more than 11% in early morning trading Monday after gaining 20% on Friday. On Sunday the company’s chief medical officer said Moderna could roll out a reformulated vaccine against the omicron variant of Covid early next year.

Airlines — Major airlines ticked up as investors bought the dip following new travel suspensions in Asia and Europe, in response to the newly discovered omicron variant of Covid-19. United, Delta and American Airlines each gained about 1%, after losing about 7% Friday. Travel booking site Expedia also rose, about 2%.
Cruise lines — Carnival, Royal Caribbean Cruises and Norwegian Cruise Line Holdings each rose more than 3% amid the broader rebound in travel stocks from Friday’s omicron-driven sell-off.
Allbirds — Shares of the shoe manufacturer rose 2.5% after several analysts initiated coverage of the stock. Morgan Stanley and Bank of America both posted a price target of $23, implying 16% upside to Friday’s close.
Coinbase — The cryptocurrency exchange’s shares rose more than 2% as the price of bitcoin rebounded, after selling off with the broader equities market on Friday. Other crypto-related equities got a lift too, with Microstrategy rising 3.4%. Tesla and Square added more than 1%.
Zoom Video — Zoom shares fell almost 2%, moving in the opposite direction of travel stocks and following a 5.7% jump on Friday. Other stay-at-home stocks dipped slightly Monday morning too, including Peloton, Netflix and Teladoc.

Merck — The pharmaceutical company’s shares fell 1.8% after Citi downgraded its stock to neutral from buy, saying development struggles for the company’s HIV drug islatravir will hurt Merck’s long-term potential.
Wynn Resorts, Las Vegas Sands — The Macao gaming sector is lower after Alvin Chau, the head of Macau’s biggest casino junket operator, and 10 others were arrested over allegedly illegal gambling platforms targeting mainland Chinese, according to a report by the South China Morning Post. Wynn fell 1.9% and Las Vegas Sands fell 1.2%

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The Christmas Price Index is up 5.7% this season relative to pre-pandemic levels, the largest increase since 2013, according to PNC.
The lighthearted index measures the cost of all items in a full verse of the Christmas song “12 Days of Christmas.”
It parallels inflationary growth in the broad U.S. economy in recent months.

Tim Macpherson | Image Source | Getty Images

Inflation is increasing gift costs for a “true love” this Christmas season.
The Christmas Price Index is up 5.7% in 2021 relative to its pre-pandemic level in 2019, the largest increase in eight years, according to an annual calculation published by PNC, a financial services firm.

The index measures the cost of all items in a full verse of the Christmas song “12 Days of Christmas.” The price — of two turtle doves, five gold rings and 10 pipers piping, for example — grew to $41,206 this year, from $38,994 in 2019.
The index isn’t meant to indicate a household’s true cost for holiday gifts.
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For one, it skews heavily toward luxury and specialty items most individuals won’t buy. The average American consumer expects to pay $648 this holiday season on gifts for family, friends and co-workers, according to the National Retail Federation.
But the lighthearted Christmas Price Index is indicative of some broad trends in the U.S. economy.

“Inflation this year has certainly been surprising to the upside,” said Amanda Agati, chief investment officer at PNC’s Asset Management Group. “This very specialty gift basket is largely mirroring what we’re seeing in the larger economy.”
U.S. inflation jumped by 6.2% in October relative to a year earlier, the largest increase in more than 30 years, according to the U.S. Bureau of Labor Statistics’ Consumer Price Index. The increase means American households are generally paying more for goods.

The headline figure is an average that masks ample variation. For example, costs are up for gasoline (50%) and used cars and trucks (26%), but increases are more modest for fresh vegetables (1.7%) and household cleaning products (1.1%) over the 12-month period.
The Federal Reserve aims for annual inflation around 2%. It’s unclear to what extent the recent spike will be longer-lasting or a temporary, pandemic-related disruption. Consumer price increases this year, to some extent, make up for tepid inflation in recent years, Agati said.
The Christmas Price Index’s increase in 2021 is the largest since 2013, when annual costs grew by 6.6%, according to PNC.
Exotic pets, performers and gold rings experienced the largest price jumps this year, Agati said.

Prices for six geese-a-laying, two turtle doves and three French hens are up 57.1%, 50% and 40.5%, respectively, in 2021 versus pre-pandemic levels, for example, according to PNC’s analysis.
The cost for 10 lords-a-leaping was up 12.6%, and 7.1% each for the 11 pipers piping and 12 drummers drumming.
(PNC’s analysis uses costs supplied by various companies. The Philadelphia Ballet supplied the cost of the lords-a-leaping, for example, while national bird suppliers, hatcheries and waterfowl farms offered those for some exotic pets. For consistency, the price sources remain the same each year.)

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British online stockbroker AJ Bell plans to launch a new app called Dodl which offers commission-free investments.
The move will see AJ Bell compete with a wave of fintechs offering similar services, including Revolut and Freetrade.
In the U.S., the rising popularity of Robinhood forced several brokerage firms to lower their commission rates to zero.

Revolut allows users to buy a shares of U.S. companies through its trading platform.

LONDON — Wall Street’s race to the bottom in stock brokerage fees is coming to the U.K.
British online stockbroker AJ Bell said Monday it plans to launch a new app which offers commission-free investments in the first half of 2022.

The move will see AJ Bell compete with a wave of fintechs offering similar services, including Revolut, Freetrade and eToro. It could also pile pressure on rival firms Hargreaves Lansdown and Interactive Investor to follow suit.
AJ Bell’s app, called Dodl, will let users buy and sell a range of popular U.K.-listed stocks. U.S. shares won’t be available initially, but the firm said it plans to add them soon after the app rolls out.
The company will also offer multi-asset funds with six different risk levels, as well as a range of “themed” funds focusing on sectors like tech, health care and responsible investing.
Customers will be able to open an individual savings account, a lifetime ISA and a general investment account. Users will be guided by “friendly monsters” giving them advice on investment decisions.
Dodl will charge an annual fee of 0.15% of the value of a portfolio, but no commission fees or tax wrapper charges. Users buying into funds will also have to pay annual costs for the underlying fund.

“Dodl by AJ Bell is for anyone looking for a low-cost, easy-to-use investment app to help them meet their investment goals such as saving for a house deposit, holidays or retirement,” AJ Bell Chief Executive Andy Bell said in a statement.
“The intuitive investment journey and streamlined investment range will appeal particularly to those that are new to investing and want a simple way to manage their investments.”
Shares of AJ Bell were up more than 1% Monday, amid a broad rally in European equity markets.
AJ Bell’s foray into zero-commission trading comes in response to a flood of fintech upstarts in the world of wealth management that have made it easier for everyday investors to access the stock market.
Silicon Valley firm Robinhood pioneered the trend in the U.S. The investing platform’s surging popularity saw several other brokerage firms follow suit in lowering their commission rates to zero.
In the U.K., a number of online trading firms have emerged offering customers cheaper stock trading and features aimed at improving financial education, including Revolut, Freetrade and eToro.
While apps like Robinhood have helped open up the investing experience to the masses, some experts fear that people are treating trading like a game.
Robinhood found itself at the center of a wild trading frenzy earlier this year which saw amateur investors pump up the stock prices of GameStop and other firms like AMC, taking inspiration from a popular Reddit community.

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Bill Ackman said the new omicron variant of the Covid-19 virus could actually give U.S. stocks a boost if symptoms turn out to be less severe.
The World Health Organization labeled the omicron strain a “variant of concern” on Friday when the Dow Jones Industrial Average dropped 900 points.
Covid symptoms linked to the omicron variant have been described as “extremely mild” by the South African doctor who first raised the alarm over the new strain.
Ackman’s comments have been widely watched throughout the health crisis and the market’s turbulent ride over the past two years. In March 2020, Ackman warned investors that “hell is coming” and urged President to shut down the country for 30 days.

Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC

Investor Bill Ackman said the new omicron variant of the Covid-19 virus could actually give U.S. stocks a boost if symptoms turn out to be less severe.
“While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible,” Ackman said in a tweet Sunday evening. “If this turns out to be true, this is bullish not bearish for markets.”

The founder and CEO of Pershing Square Capital Management added that it would be bullish for the equity market and bearish for the bond market.
First detected in South Africa, the new Covid strain has now been found in more than a dozen countries, causing many to restrict travel from southern Africa. The World Health Organization labeled the omicron strain a “variant of concern” on Friday when the Dow Jones Industrial Average dropped 900 points to suffer its worst day since October 2020.
Covid symptoms linked to the omicron variant have been described as “extremely mild” by the South African doctor who first raised the alarm over the new strain.
Still, the WHO said it will take weeks to understand how the variant may affect diagnostics, therapeutics and vaccines.
Ackman’s comments have been widely watched throughout the health crisis and the market’s turbulent ride over the past two years. At the height of the Covid-19 crisis in March 2020, Ackman came on CNBC to warn investors that “hell is coming” and urged President Donald Trump and corporate America to shut down the country for 30 days to contain the outbreak, calling it the only option to rescue the economy.

Days after the interview, Ackman revealed his firm exited the short positions just as the S&P 500 bottomed, pocketing more than $2 billion in bets against markets that month.
In July when Wall Street was grappling with the delta Covid variant, Ackman said it doesn’t pose a significant threat to the economic reopening and he sees interest rates rising on the back of the big comeback.
More recently at the end of October, the hedge fund manager called for the Federal Reserve to begin reining in the support it has provided for the economy during the pandemic. He said the central bank should “taper immediately and begin raising rates as soon as possible.”
Pershing Square manages about $13 billion in assets and the hedge fund is up 27.2% through October and 21.6% net of fees, according to the company’s statements. It followed a banner 2020 during which the fund returned a whopping 70.2% on net.
Ackman has been betting big on a rebound in the restaurant, retail and hotel industries. His top holdings at the end of the third quarter included Lowe’s, Hilton, Restaurant Brands and Chipotle. He picked up Domino’s Pizza shares earlier this year following a pullback.

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