The Omicron scare seemed to only last one day, with global markets generally higher overnight.
The sell-off that marred Black Friday and wiped-out November gains for the S&P 500 index and the Nasdaq Composite, was corrected, despite the World Health Organisation (WHO) declaring Omicron more transmissible than the Delta strain.
Early signs, however, suggest that this new variant could be less severe than Delta.
This, along with Joe Biden declaring there would be no new restrictions apart from travel restrictions for non-US residents from southern African countries, lifted the markets.
The European Union, UK, Singapore and Japan announced similar travel bans.
In Australian trade yesterday, the S&P/ASX 200 dropped as much as 1.3% before recovering to close 0.5% lower, down 39.6 points, at 7,239.7.
That recovery should continue this morning, following the US rebound.
ASX futures were up 50 points or 0.7% to 7264 near 7.20am AEDT.
Heres’ what we saw:
- The Aussie dollar fell from highs near US71.55 cents to lows near US71.15 cents and was near US71.30 cents in afternoon US trade.
- Global oil prices rebounded on Monday but only regained up to 2.6% of Friday's 12-13% declines.
- The Brent crude price rose by US72 cents or 1.0% to US$73.44 a barrel.
- The US Nymex crude price lifted by US$1.80 or 2.6% to US$69.95 a barrel.
- Base metal prices rose by up to 1.2% on Monday with nickel up the most.
- Zinc fell by 0.7%.
- The gold futures price fell by US$3.20 or 0.2% to US$1,782.30 an ounce.
- Spot gold was trading near US$1,783 an ounce at the US close.
- Iron ore lifted by US$3.30 or 3.4% to US$99.95 a tonne.
Australian markets
Westpac Banking Group Ltd has admitted to "widespread compliance failures" and faces a $113 million fine.
The Australian Securities and Investment Commission (ASIC) hit Westpac with six civil penalty proceedings in the Federal Court for breaches across multiple Westpac divisions including banking, superannuation and wealth management brands as well as its former general insurance business.
Breaches included charging fees to the dead.
"The alleged conduct occurred over many years and affected many thousands of consumers," ASIC stated.
"ASIC is disappointed to have to yet again commence legal proceedings, on this occasion no fewer than six times, against a major bank," ASIC deputy chair Sarah Court said.
"The conduct and breaches alleged in these proceedings caused widespread consumer harm and ranged across Westpac's everyday banking, financial advice, superannuation and insurance businesses.
"A common aspect across these matters has been poor systems, poor processes and poor governance, which is suggestive of an overall poor compliance culture within Westpac at the relevant time."
ASIC’s proceedings have been described as unprecedented.
"However, these were exceptional circumstances,” Court said.
"ASIC had numerous Westpac-related matters under investigation through the course of 2021, and we decided to expedite those matters for consideration by the Court at the earliest opportunity."
Westpac will remediate approximately $80 million to customers, with the bank and ASIC agreeing that more than $100 million in penalties is appropriate.
"As flagged, we have been working to resolve a number of outstanding regulatory matters before the bank," Westpac CEO Peter King told investors in a statement on Tuesday,
“We have co-operated with ASIC through the investigations and the process to get to this resolution today.
“This outcome is an important step forward for us as we continue to fix issues and build stronger risk foundations.
“In each of these matters, Westpac has fallen short of our standards and the standards our customers expect of us. The issues raised in these matters should not have occurred, and our processes, systems and monitoring should have been better. We are putting things right and unreservedly apologise to our customers,” King said.
Seven West takes stake in Raiz
Seven West Media Ltd (ASX:SWM) has taken a 6.6% stake for $10 million in Australian mobile-first financial services platform, Raiz Invest Limited.
Raiz has funds under management in Australia of approximately $1 billion and will work with Seven to help accelerate its standing in the Australian market.
Raiz will be able to scale up in the next 12 to 24 months on the back of Seven’s media clout and advertising power.
AMP’s demerger on track
AMP’s aim to separate its private markets business ahead of its planned 2022 demerger remains on track
"We have two businesses with considerable growth opportunities, but which operate in very different markets, with different customers, and geographic focus," said AMP chief executive Alexis George in a statement. "Separation and demerger will enable both businesses to accelerate their growth strategies, as well as simplify and improve efficiency."
George believes AMP has strong capability to fill the "significant gap" in the retirement market, while also scaling the business by taking their products direct to clients.
“Immediate priorities are to get the demerger done, meet our commitments on costs, drive forward on growth opportunities in bank and platforms, and set up AMP for a strong future,” she said.
Australian indices (at time of writing)
- ASX 200 0.35% to 7,264.80.
- ASX24 futures rose 0.6% to 7,255.
- S&P/ASX Small Ordinaries gained 0.29% to 3,448.90.
- All Ordinaries rose 0.43% to 7,593.00.
US markets
Markets rebounded on Monday, led by the S&P technology subindex up 2.6%.
Shares in vaccine maker Moderna rose by 11.8%.
Shares in Tesla gained 5.1%.
Shares in Amazon, rose 1.6%.
Now for Omicron
Federal Reserve chairman Jerome Powell said, “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.
“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.”
That aside, the fear about Omicron didn’t last too long with US markets trading higher on Monday.
In a televised address to the nation about the Omicron variant, President Joe Biden said while Omicron is a cause for concern, there is no need to panic and moves against it won’t involve “shutdowns or lockdowns”.
BIden said, “we’ll fight this variant with scientific and knowledgeable actions and speed, not chaos and confusion.”
“On Thursday, I’ll be putting forward a detailed strategy outlining how we’re going to fight COVID this winter — not with shutdowns or lockdowns, but with more widespread vaccinations, boosters, testing and more,” the president said during a White House speech.
Dorsey quits Twitter
The other big news to come out of the US was Jack Dorsey’s resignation as CEO of Twitter Inc.
Chief technology officer Parag Agrawal was named his successor effective immediately.
This was Dorsey’s second stint as CEO and he leaves the position with Twitter in a much stronger position than when he entered.
Dorsey has reversed criticism that Twitter had fallen behind Facebook and new social media apps such as TikTok in innovation.
He announced his resignation via Twitter. "After almost 16 years of having a role at our company … I decided it's finally time for me to leave," he said on the social media platform.
"I have worked hard to ensure the company can break away from its founding and founders."
Speaking of Agrawal, Dorsey said, "My trust in him as our CEO is bone-deep."
Twitter shares fell 1.6% to $US46.24 on the news.
Dorsey is CEO of payments platform Square, which will acquire Afterpay for $39 billion.
US indices
- Dow Jones gained 0.7% to 35,134.94.
- S&P 500 gained 1.3% to 4,655.27.
- Nasdaq rose 1.9% to 15,782.83.
European markets
Europe also rebounded.
The pan-European STOXX 600 had its best day in a month - but only regained a portion of the 3.7% loss on Friday.
Travel & leisure stocks rose by 1.8%.
There were also gains in energy, financial and mining stocks.
In London trade, shares in Rio Tinto lifted by 1.7% and BHP shares gained 2.9%.
European indices
- STOXX 600 rose 3.19% to 467.24.
- German Dax gained 0.2% to 15,280.86.
- UK FTSE rose 0.9% to 7,109.95.