Geoffrey Smith 

Investing.com — 1,000,000 Covid-19 cases are posted in the United States every day. However, this number could be higher. The markets continue to be influenced by the idea that faster spreading of a less dangerous strain will lead to fewer pandemics. The Institute of Supply Management issues its December manufacturing survey. Meanwhile, the Labor Department releases their November JOLTS Report. China’s manufacturing PMI reaches its peak since June. OPEC also meets with allies to determine February’s output quotas. This is what you should know about financial markets Tuesday 4th January.

1. Omicron surge

More than 1,000,000 cases of Covid-19 were reported by the U.S. on Monday. This beats any other country’s previous record. The figures are skewed by the holidays, which have delayed reporting in some cases, but which – as usual – sharply increased the potential for transmission.

Omicron, the new dominant strain of the disease, appears to cause less severe illness than previous strains: hospitalizations are still around 30% below last year’s peak, and in South Africa, where the new variant first emerged, the wave of infections has peaked without overstraining the country’s health service. Nevertheless, this short-term increase in cases is causing increased absenteism in the service sector, such as healthcare and airlines. In the United States, over 4,000 flights have been cancelled in the past weekend.

To stem rising cases, Delhi, India’s capital city, imposed a curfew on weekends.

2. Two-week delay for 5G Launch by Carriers

Verizon (NYSE:) and AT&T (NYSE:) agreed to delay the launch of 5G services for two weeks after more pressure from aviation regulators and airlines, but said that their services would still go live this month.

The carriers are in a hurry to start monetizing the investments they’ve made in spectrum and network infrastructure, while the Federal Aviation Authority and airlines are concerned about the risk to cockpit safety systems in an around airports.

Airlines 4 America, an industry lobby organization, threatened to cancel thousands more flight cancellations unless they were resolved. Airline stocks were broadly higher on perceptions that Omicron will bring an accelerated end to the pandemic without further economic disruptions, while the two carriers’ stocks edged up.

3. Pandemic fears set stock prices higher

U.S. stocks will open at new records later due to Omicron’s belief that it will accelerate the U.S. towards herd immunity sooner, allowing for the continued economic recovery.

Sentiment was also boosted by some eye-catching headlines including Tesla’s record deliveries in the fourth quarter and Apple’s brief flirtation with a market value of $3 trillion.

They were 0.4% higher at 6:20 am ET (1220 GMT), while both the and was in line.

Ten-year Treasury yields in the U.S. were at 1.62% after climbing 13 basis points over the first few days of 2022. This was despite fears that inflation will remain high for the next several months.

4. ISM PMI expects to cool; China’s reaches 6-month high

The Institute for Supply Management will release its monthly manufacturing survey at 10 AM ET, and is expected to show a slight cooling off in December, both in terms of overall activity and – importantly – in input and output prices.

The Labor Department will also publish its monthly Job Openings and Labor Turnover Survey for November, which will show whether October’s dip in the so-called ‘quit rate’ was just a blip or the start of something more like a trend.

Economic data from around the world overnight were broadly encouraging, with China’s Caixin manufacturing PMI beating expectations to hit its highest level since June. In the Eurozone, French inflation data supported the European Central Bank’s view that inflation is close to peaking, while German unemployment fell more than expected in December. Although November’s German retail sales were not as strong as expected, they were still below expectations.

5. OPEC+ plans to keep increasing its output quotas 

When they meet in Vienna later this month, the Organization of Petroleum Exporting Countries (OPEC) and its allies will likely approve a further 400,000-barrel-a-day increase of output quotas.

Whether OPEC countries – in particular those in Africa and Latin America – will actually be able to meet those production quotas is another question. Due to past underinvestment, which has catching up with the state-owned oil companies, the bloc has not met its production targets over three months. This isn’t a problem for Russia and Saudi Arabia, two of the largest exporters in the bloc.

China also cut its export quotas to refiners in an apparent move that indicates the authorities are trying to maintain a check on domestic prices.

Futures increased 0.3% to $76.31 per barrel while futures rose 0.3% at $79.19 per barrel.