Virus fears lead to post-Thanksgiving blues for stocks, oil
S E E D E D C O N T E N T
LONDON (Reuters) - U.S. stock index futures pointed to a slide at the post-Thanksgiving Wall Street open and oil hit two-month lows as fears of a possibly vaccine-resistant coronavirus variant sent investors scurrying to safe-haven assets.
Scientists say the variant, detected in South Africa, Botswana, Israel and Hong Kong, has an unusual combination of mutations, may be able to evade immune responses and could be more transmissible.
Britain said it was the most significant variant to date and was one of several countries to impose travel restrictions on southern Africa.
The European Commission also said it wanted to consider suspending travel from countries where the new variant has been identified, though the World Health Organization (WHO) cautioned against hastily imposing such restrictions.
"This could be the moment that people look back on as derailing the economic recovery and rate rises but what we have is a big insertion of uncertainty rather than something material," said Peter Rutter, head of equities at Royal London Asset Management.
"The very fact we don't know is what's concerning the market."
The WHO is convening an experts' meeting on Friday to evaluate whether the new variant is a "variant of concern".
It will take a few weeks to understand the impact of the variant, a spokesperson said.
U.S. crude futures plunged 6.7% to $73.17 a barrel and Brent crude was down 5.86% to $77.43 on the possible hit to travel and demand for fuel. [O/R]
S&P 500 futures fell 1.8% and Dow futures slid 2.2%.
U.S. equity markets were shut on Thursday for Thanksgiving and close early on Friday.
Global shares fell 0.7% and were on course for their worst week since early October.
European stocks were 2.6% lower, on track for their worst day since September 2020. ( EU )
The pandemic playbooks were back out. Tourism-sensitive stocks such as plane engine maker Rolls Royce (LON: RR ), easyJet (LON: EZJ ) and International Consolidated Airlines (OTC: ICAGY ) all saw double digit losses in Europe.
Malaysian rubber glove maker Supermax, which soared 1500% during the first wave of the pandemic, leapt 15%.
Germany's DAX lost 2.8% and Britain's FTSE 100 also fell 2.8%, to its lowest in more than a month.
MSCI's index of Asian shares outside Japan dropped 2.2%, its sharpest fall since August. Japan's Nikkei skidded 2.5%.
Giles Coghlan, chief currency analyst at brokerage HYCM, said the closure of the U.S. market for Thanksgiving had exacerbated moves.
"We need to see how transmissible this variant is, is it able to evade the vaccines - this is crucial," Coghlan said.
"I expect this story to drag on for a few days until scientists have a better understanding of it."
As investors dashed for safe-haven assets, the yen jumped more than 1% to 113.9 per dollar, having languished earlier this week at five-year lows.
The dollar fell 0.5% against an index of currencies and the euro rose 0.64% to $1.1278.
The single currency, however, fell to near 6-1/2 year lows against the Swiss franc at 1.044 francs per euro.
South Africa's rand fell more than 1% to a one-year low and its 2030 bond yield soared 19 basis points (bps). Bond yields move inversely to price.
Other bond markets strengthened, benefiting from their safe haven status. Ten-year Treasury yields fell 12 bps to 1.5226% and 30-year yields were down 9 bps to 1.8818%. [US/]
Germany's 10-year bond yield was down 7.5 bps at -0.32%, set for its biggest daily fall since March. [GVD/EUR]
Gold rose 1.3% to $1,810 an ounce.
The market swings come against a backdrop of already growing concern about COVID-19 outbreaks driving restrictions on movement and activity in Europe and beyond.
Markets had previously been upbeat about the strength of economic recovery, despite growing inflation fears.
"Going into year-end, investors may prefer to keep a bit more in safe havens and we also have to assess how it feeds into central bank risk assessments, even if this variant turns out not to be of huge concern," said Commerzbank (DE: CBKG ) rates strategist Rainer Guntermann.
"It's a reminder that the pandemic could pop up again at virtually any time."
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I abhor making predictions but if this pans out in a negative way, rest assured that Biden will be blamed and not the least for not having the gumption to mandate vaccinations across the board.
If it's vaccine resistant, then what's the point of taking the shots. Mandates simply won't work, and can't be enforced. Of course Biden will unjustly be blamed, just like Trump was. The American populace doesn't respond well to fear mongering.
The American populace responds fantastically to fear mongering, as long as it is the right kind of fear. Unfortunately because the current pandemic virus doesn’t yet have a fatality rate of 20+ % Americans aren’t going to personally worry about it too much. But hell, if we keep letting it hang around and do that whole “evolution” thing every few months, maybe we will get there. And that will be entirely because of anti-vaxxers, fuck them they are the most selfish pieces of shit on planet earth.
To protect one against the variants it is successful with while the boyz 'n galz figure out the latest version. Your attitude is defeatist.
Some good news with a lot of bad news. Oil cost per barrel dropped so it will be interesting to see what OPEC does in its December meeting. Will they increase production as they have been doing (very slowly) or stop it with the dark clouds on the horizon?
Biden is releasing a portion of our oil reserve to help. He has also launched an investigation as to why prices are so high in some states. Here in CA, our prices are the highest in the nation. In some areas, it is over $6.00/gal.
Greed IMO.
Here it is about 3.09.
Biden is responsible for much the higher prices.
How? Specifically how, I want a detailed breakdown as to exactly how Biden is responsible for higher gas prices.
Please do not post inane cartoons in my seeds ... thanx
It's called free speech
Ah yes, the infamous free speech squirrel ... that's why you delete so many comments from your seeds.
You were complaining about cartoons. That's the official response.
That and strict regulations.
In some states it is less than $3.00. As I now use a scooter, I spend about $20/mo.
Biden isn't. In fact, he has just taken two steps in regards to the problem. He is releasing some of our reserve. He is also having oil companies investigated for possible price gouging.
Meanwhile, stores here are still full and people are spending.
Is the term "Black Friday" racist?
how much time did it take you to think that one up?
No? Unless you are aware of some overtly racist history behind it…
Give it a year or two. Master bedroom is higher up the list.
Trying to make it so eh?
There is none. It is called black Friday because the increased sales put many stores back in the black. It has a financial history not a racist one.
I am waiting to hear if there is a new rise in CV cases from the Macy's parade. My local news reported that NY did not require precautions for the crowd or participants.
I am surprised we don't have more cases here. Everyone is acting like it never happened.
Now when I have to go into some place I usually only see like three or four people wearing a mask, myself included.
You're fully vaxxed and still wear a mask?
I still try to social distance and stand back from people too.
We had really bad winds here which has totally screwed up my sinuses. I had to go to the store for a neighbor and I could barely breath with my mask on and was in distress. The other shoppers in my check out line saw I was in trouble and they very kindly let me go first as I only had one item.
I am vaxed and boostered but still wear a mask due to underlying health concerns. Also, strangers around me don't know that I am vaxed or not. So part of why I do it is to put strangers more at ease.