Omicron in the US, Data from ADP and Insider Sales

2 de dez. de 2021

The markets were scared again. In general, over the past 4 trading sessions, it was scary 3 days out of 4. That in itself hints at a change in the vector of market sentiments. Yesterday, the news was chosen as a pretext that a vaccinated US resident, after traveling to South Africa, brought home some fresh omicron with him. Thus, the United States joined the list of 23 countries where a new strain of the virus was discovered.

We emphasize once again that sales are not only about the omicron - they are about the general readiness of the markets for a fall or at least a correction. And you can always find a reason.

Speaking of reasons, Powell again spoke in Congress yesterday and once again noted that the Fed's attitude towards inflation has changed. The country's central bank has definitely moved from the stage of denial to the stage of acceptance. Direct speech of the head of the FRS on this matter sounds like this: "The Central Bank should be ready to respond to the possibility that inflation will not decrease in the second half of next year."

A change in the vector of monetary policy, in our opinion, is a more obvious threat to the US stock market than the potential damage from the omicron, which may not happen.

On the question of changing the vector. After yesterday's data from ADP, it is even strange to talk about problems in the US labor market. The indicator added over 500K again in November. And in general, in 2021 there was not a single month when the indicator did not grow. At the same time, the average monthly growth exceeds 500K. When did this happen? That is, the Fed will no longer be able to cover up with a double mandate.

Returning to the expediency of selling on the US stock market. The general principle is simple: follow the money. But not behind those behind which stand the amateur traders from Robingood and other gatherings of amateurs, but behind those who represent the real picture. We already wrote that Buffett sits on a huge bag of cash and waits like a spider. Here's another fact: CEOs and corporate insiders (Musk, Bezus, Zuckerberg, Brin, Page and others) sold a record $ 69 billion in shares in 2021. According to InsiderScore / Verity, as of Monday, insider sales are up 30% from 2020 to $ 69 billion and 79% from the 10-year average. The reason on the surface is the total overvaluation of stocks.