Yesterday's worries have been set aside this morning, and stocks are bouncing on very good breadth. There are 6400 advancers to 1500 decliners, and the number of new 12-month lows is sharply lower with less than 100. The pockets of strong momentum are still quite sedate, with only a couple dozen names up more than 10%, but the longer this action lasts, the more confidence will build.
There is still danger that Powell may make more hawkish comments or that Omicron developments will be problematic, but we had some panic yesterday over those issues, and that has helped to price in the worst-case scenarios.
The biggest potential headwind is if President Biden starts imposing new travel restrictions. There are rumors that something will be announced, and I suspect that is keeping the buyers a little wary.
I've not been rushing to add to positions this morning but will likely be active on weakness. I think some of the biotechnology, growth, and small-caps are washed out and in position for better action into the end of the year. We still have the potential for negative macro headlines, but it is looking like Omicron may not be the disaster that many have feared.
My Stock of the Week, SAB Biotherapeutics (SABS) , had positive phase 2 news related to its treatment for seasonal flu. This bodes well for upcoming data on its Covid treatment. I'm a buyer on dips.