FX168 Financial News (North America) due to fears that the rebound in COVID-19 infection cases will slow global economic growth, the U. S. stock market fell sharply on Monday. With the passage of time, the sell-off increased, Dow JonesThe index is on track to record its biggest decline so far this year.
In the U.S., the Dow fell 777 points, or 2.2%, after falling more than 800 points earlier, more than the 2% drop at the end of January. The s & p 500 fell 1.9%, with energy and industrials among the worst performers. NASDAQThe composite index fell 1.6%.
(source: Zerohedge)
At one point, the Chicago Board options Exchange volatility index (VIX), known as the "panic index", soared more than 30 per cent.
The yield on the 10-year Treasury note fell to a five-month low of 1.19 per cent, adding to fears of an economic slowdown. The price of crude oil has fallen by 5%.
Chief Economic adviser to Allianz, Pacific Investment Management (PIMCO)Mohamed El-Erian, former chief executive, said on Monday: "there are two concerns intertwined this morning: concerns about the technical side of the market and concerns about growth. That's what all asset classes told you this morning. "
Coronavirus cases in the United States rebounded this month as the Delta virus spread among unvaccinated people. The US averaged nearly 30, 000 new cases a day in the seven days to Friday, up from about 11000 a month ago, according to the Centers for Disease Control and Prevention (CDC). Cases are surging around the world as a result of the spread of the Delta mutated virus.
Shares of United Airlines and American Airlines fell more than 5%. Delta is down 4%. As share prices of cruise ships and airlines fell, so did major stocks linked to the global economy. BoeingDown nearly 5%, General MotorsAnd Caterpillar.Down about 3%.
Morgan Stanley"with corporate earnings and economic growth slowing significantly, the market seems ready to take a more defensive stance," Mike Wilson, chief US equity strategist, wrote in a report on Monday. In our view, the market breadth has been deteriorating for months, which is just another evidence of the mid-cycle transition. It usually ends with a substantial (10-20%) index level correction. "
Wilson advises customers to buy Mondelez InternationalAnd other commodities to fend off declines.
Thomas Lee, co-founder and analyst of research firm Fundstrat Global Advisors, said what investors saw in the current market was a "July crash" caused by COVID-19 Delta variant virus. He believes that concerns about the delta variant could lead to a 5% correction in the s & p 500, but this will lay the foundation for a strong rebound for the rest of 2021.
Oil prices fell on concerns about a slowdown in economic growth and OPEC+ 's agreement to start phasing out production cuts. Energy stocks are one of the worst performers in the market, ConocoPhillipsDown more than 3%. ExxonMobilDown 3%. West Texas Intermediate (WTI) crude fell 6% to about $68.12.
As yields fell, banks took a hit, affecting their earnings prospects. JPMorgan ChaseAnd Bank of AmericaIt fell by about 2.5% respectively.
Large technology stocks are not immune, AppleAnd Alphabet shares both fell more than 2 per cent.
However, some defensive stocks bucked the trend during the market sell-off. Wal-MartAnd Procter & GambleAnd the shares of many utility companies rose.
Although the stock market fell on Monday, the overall damage to the market remained mild. The s & p 500 is just 3% below last week's record, and investors hope that better-than-expected results will push the stock market to the bottom.
Billionaire investor Bill Ackman said Monday that the spread of the Delta variant does not pose a major threat to the reopening of the economy because it can accelerate the pace of mass immunity.
"I hope it will inspire people who have not been vaccinated to get vaccinated. I don't think this will change the behavior to a great extent, "Ackerman said." "in my opinion, you will see a massive economic boom. We are going to have a very strong economy this fall. "
There will also be a busy corporate earnings week this week, with nine Dow stocks reporting results and S & P 76 stocks reporting quarterly results. United Airlines and American Airlines will release reports, social media company SnapAnd Twitter.A report will also be issued. CSX 、 Johnson, Coca-Cola, Honeywell、 IBM, IntelAnd Netflix.It's all on the list.