[ad_1]
Text size
Stocks had their worst day in months on Monday, as the latest Covid-19 worries hit a wall of angst among existing investors over inflation, the Federal Reserve’s upcoming move and a profit season with a high bar to meet. As for Covid, after a spring break from the pandemic in the United States, cases are on the rise again and grim data points around the world are shaking investor confidence in a global recovery.
The deepening worries tipped the stock markets into a steep drop on Monday and prompted investors to flee to bonds.
the
Dow Jones Industrial Average
closed 726 points, or 2.1%, its worst day since October. the
S&P 500
fell 1.6% and the
Nasdaq Composite
fell 1.1%. The yield on the 10-year US Treasury bill fell below 1.2%, its lowest level since February. And oil and other commodities also sold.
Over the weekend, news of positive tests from Olympic athletes, who have now gathered in Tokyo for the games set to start there at the end of the week, raised concerns about the timeliness of the whole event. And on Monday, the American Academy of Pediatrics recommended that all students and school staff wear masks regardless of their immunization status. It’s a tougher standard than the Centers for Disease Control and Prevention proposed last week, which exempted vaccinated students and teachers from the mask.
Meanwhile, new cases of the virus have increased by 34% globally in the past two weeks, according to the New York Times. In the United States, the number of new daily cases remains low, compared to other points in the pandemic, but is up 140% in the past two weeks.
“The summer wave of COVID is gaining momentum as the country seems to have forgotten that we are still in the midst of a pandemic,” Evercore ISI analyst Josh Schimmer wrote in a note released Sunday.
A further rise in Covid cases is of concern to the market as it impacts the ongoing economic recovery, or prolongs supply chain disruptions and pandemic-related bottlenecks hitting businesses large and small. All 11 sectors of the S&P 500 closed in the red on Monday, with the pain concentrated in the more cyclical pockets of the market. S&P 500 energy stocks ended down 3.6%, while financials and industrials lost 2.8% and 2.1%, respectively. Defensive consumer staples closed 0.3% and growth-oriented tech fell 1.3%, among the better-off groups in the index on Monday.
Investors also sought safety in government bonds on Monday, pushing their yields lower as prices rose. The yield on the 10-year US Treasury bill fell well below 1.2%, down about 0.12 percentage points. It was around 1.75% as recently as at the end of March.
Oil prices fell on Monday, given concerns about the recovery linked to Covid and an agreement between oil-producing countries this weekend to increase monthly production from August. WTI crude futures have stabilized at around 7.5%, at $ 66.42 per barrel. It was their biggest single-day drop in over a year and wiped out all oil gains since May.
Speaking on CBS’s Face the Nation on Sunday, former U.S. Food and Drug Administration Commissioner Dr. Scott Gottlieb, who now sits on the board of directors of
Pfizer
(ticker: PFE), said the current wave of viruses is likely much worse in the United States than the numbers show.
“I think at this point we’re probably underestimating the number of infections in the United States right now, because as many infections are occurring in younger, healthier people who could get disease. benign, they’re… probably not showing up for testing, ”Gottlieb said. “As there are revolutionary cases either asymptomatic or mildly symptomatic and those that have been vaccinated, they do not show up for testing because if you have been vaccinated you don’t think you have the coronavirus. even if you develop a mild illness.
The current spike in cases in the United States is due to the spread of the Delta variant, a new, highly contagious form of the virus. The CDC estimates that the Delta variant accounted for nearly 60% of infections in the United States in the two weeks ending July 3.
Speaking at the White House on Friday, CDC director Dr Rochelle Walensky said the number of new cases per day had increased by 70% in just one week. Hospitalization and death rates were also increasing, but not as rapidly.
“We are seeing outbreaks in parts of the country that have low immunization coverage because unvaccinated people are at risk,” Walensky said. “And fully vaccinated communities are generally doing well. “
Meanwhile, athletes from around the world are gathering in Tokyo for the Olympics, the opening ceremony of which is scheduled for Friday. Over the weekend, American tennis player Coco Gauff announced that she had tested positive for Covid-19 and would not be competing in the Olympics. Two South African footballers tested positive on Sunday, as did six British track and field athletes.
The Games are increasingly unpopular in Japan. Monday,
Toyota engine
(TM) said it would not broadcast any advertising related to the Olympics and that its executives would not attend the opening ceremonies, according to Reuters.
Meanwhile, England lifted Covid-19 restrictions on Monday, even as cases are rising rapidly. British Prime Minister Boris Johnson has been forced into self-isolation after a minister tested positive for Covid-19.
During the White House briefing on Friday, Walensky of the CDC said restrictions across the United States should depend on the local situation.
“If you have areas with low vaccination and high case rates then I would say that local decision makers might be wondering if masking at this point would be something that would be useful for their community until they increase their rates. vaccination rate because more people than not in the community are not vaccinated, ”Walenksy said.
Write to Josh Nathan-Kazis at [email protected]
[ad_2]
Source link