Dow Jones and Nasdaq 100 retreat sharply as Omicron fears rise

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US stocks declined sharply as investors remained concerned about the rising number of Covid-19 cases in the country. The S&P 500 index declined for the third straight day while the Dow Jones and Nasdaq 100 index declined by more than 300 points each. The biggest declines were growth stocks like Workhorse, Peloton, and Carvana. Oil and gas companies also retreated as the price of crude oil fell. Airlines like United, Southwest, and American also declined.  At the same time, US Treasury yields diverged, with the 10-year falling to 1.400% and the 30-year rising to 1.38%. In a separate report, Goldman Sachs analysts decided to slash the US GDP estimates. It expects that the economy will rise by 2% in the first quarter and 3% in Q3.

Oracle made headlines on Monday after the company announced a blockbuster $30 billion acquisition of Cerner. Cerner is a company that provides medical records to employers, patients, and the government. It competes with the likes of Epic Systems and Allscripts Healthcare. This is the biggest deal that Oracle has made in the past few years. The deal came a few months after Microsoft acquired Nuance, a company that provides healthcare solutions. Another big mover was Nike, the giant sporting company that announced strong results. 

The price of crude oil and other commodities declined in the overnight session as the Omicron concerns rose. The market is concerned that countries will implement new lockdowns and restrictions to curb the disease. The UK government is expected to announce lockdowns after Christmas. Other countries in Europe like the Netherlands, Austria, and Germany have announced restrictions. Therefore, there are concerns that demand for crude oil will drop. The only key data to watch today will be the latest Canadian retail sales numbers.

XBR/USD

The XBRUSD pair declined to a low of 69.20 as concerns of the Omicron rose. This was the lowest level since December 3rd. The price is also significantly below the year-to-date high of 86. It is along the lower side of the Bollinger Bands. The pair has also moved below the 25-day and 50-day moving averages, while oscillators are pointing lower. Therefore, the pair will likely keep falling as bears target the key support at 67.

USD/JPY

The USDJPY pair wavered on Tuesday morning as investors continued to focus on the latest Fed and BOJ interest rate decision. The pair is trading at 113.52, which is slightly above last week’s low of 113.13. The pair is also slightly above the lower side of the rising channel. The MACD has moved slightly below the neutral level. It also seems to be forming a giant bearish flag pattern. Therefore, in the near term, the pair will likely remain inside the current channel.

EUR/USD

The EURUSD pair is trading at 1.1280. This price is between the rectangle channel that is shown in red. It is also at the same level as the 25-day moving average, while the Relative Strength Index (RSI) is at a neutral level. Therefore, the pair will likely remain in this range today with a bearish bias.