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05.01.202207:16 Forex Analysis & Reviews: The new year has started for stock indexes with another growth. Anthony Fauci warns of an increase in hospitalizations in the United States.

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Exchange Rates 05.01.2022 analysis

Key US stock indices are growing again in the new year 2022. To be honest, this is starting to scare, since the US stock market is growing no matter what and even when there is no reason for it at all. Of the three main indices, only the NASDAQ has not shown growth over the past week. The Dow Jones and S&P 500 indices continue to update their highs almost every day. In such circumstances, one could generally conclude that it makes no sense to pay attention to the "foundation" or "macroeconomics". What's the point if all indices keep growing? In the States, all attention is now shifted towards the "omicron strain". The situation is becoming critical. Over the past day, more than a million new cases of the disease have been recorded. However, mortality from this variant of the virus is still very low. In the USA, no more than 1,000 people die every day. Anthony Fauci, the country's chief infectious disease specialist, said that the number of hospitalizations may still increase because the total number of diseases is growing. Fauci warned about this earlier. He said that the positive effect of a mild course of the disease can be offset by a much higher level of infection of omicron than that of the same delta. There is also an increase in hospitalizations among children under 17 in the United States, the number of which has doubled over the past week. In general, the situation is absolutely sad, but the country's authorities are still in no hurry to introduce a "lockdown".

In principle, the situation is the same in the rest of the world. Very few countries have decided to impose a strict quarantine to stop the spread of omicron. As you can see, at the moment, the markets are not worried at all about the new "wave" of the pandemic. The US dollar is not declining in pair with the euro and retains a negative dynamic for itself in pair with the pound sterling, which has a technical basis. And US stock indices continue to grow at all. But what is this growth based on? The Fed has already begun to reduce the quantitative stimulus program. And in March, it can completely complete it and move on to raising rates. Maybe stock market participants are trying to "grab a piece" at last, waiting for the onset of "troubled times" for investments in shares of American companies? One way or another, but so far we cannot even state a correction in the stock market. Many experts continue to insist that a "bubble" is inflating in the US stock market at this time and sooner or later it will burst. Also, the fate of the Chinese developer Everegrande is still unclear, which has been on the verge of bankruptcy for several months and risks dragging down a huge number of other companies around the world. In general, there is no stability and calmness in the markets now and there cannot be.

Paolo Greco
Analytical expert of InstaForex
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