Stock futures were looking to bounce back from yesterday’s sell off with all three major indices in the green to start the day. The Dow sank more than 700 points in yesterday’s session to post its worst day in 8 months.
Evidently related to the “day of red” that traders and investors saw yesterday are the rising fears surrounding a “fourth wave” of the virus that threatens to put a halt to the country’s recovery. Find out what the pros are saying could be on the horizon for Americans in this fragile time in the full article by clicking the link below.
Plus, crude oil and energy stocks took major hits yesterday, reacting to Sunday’s OPEC+ agreement. What could be in store for crude oil and energy in the near future? Learn about all of this and more in today’s morning briefing.
Covid-19 Delta variant prompts fresh lockdown worries, adding fuel to Wall Street’s dramatic plunge...
The increase in Covid-19 cases, fueled by the Delta variant and vaccination apprehension, has increased hospitalizations and fatalities. According to data from Johns Hopkins University, an average of 32,278 new Covid-19 cases were reported each day in the previous week. That’s a 66% increase over last week’s average daily cost and a 145% increase from two weeks earlier. This week, an average of 258 Americans died with Covid-19 per day, increasing 13% over the previous week’s daily mortality rate. As the number of cases rises, the Delta variant is triggering flare-ups in unvaccinated areas of the nation, leading to an increase in hospitalizations.
There is also data from the US Department of Health and Human Services, which reports that as of Monday, 24,923 persons had been admitted to hospitals with new Covid-19 cases. Dr. Rochelle Walensky, head of the US Centers for Disease Control and Prevention, remarked, “There’s a common theme behind the worsening Covid-19 numbers.” At a recent briefing, Walensky stated, “This is becoming a pandemic among the unvaccinated.”
Others have weighed in as well, and opinions vary. “The variation is less lethal than previous strains,” according to Bill Ackman, founder and CEO of Pershing Square Capital Management, “and the U.S. could develop herd immunity faster if more individuals recover from the illnesses.” Other investors are concerned that the Delta Covid strain may jeopardize the U.S. recovery. Shares of firms in industries that were generally expected to profit the most from the economy’s reopening have taken the brunt of the losses. You can see the evidence in the indexes’ overall performance yesterday.
The Dow Jones Industrial Average Drops More Than 700 Points on its Worst Day Since October...
Putting it plainly, concerns about inflation are rising, and COVID is making a potential comeback, as discussed before. This could explain why yesterday, the major indexes fell to their lowest levels since May, despite quarterly results indicating a solid economic recovery. Fears of widespread coronavirus infections led the Nasdaq and S&P 500 indexes down for the first time in over two months. Benchmark rates plummeted for the first time in over three months as investors sought refuge from the uncertainty. The Dow brought in the worst results of the three and suffered its steepest drop since October 2020.
Yesterday, the S&P 500 index sank 68.67 points, or 1.6%, to 4258.49. The Nasdaq Composite dropped 152.25 points, or 1.1%, to 14274.98, marking its sixth straight down session. After a three-week gaining streak, U.S. market indices fell last week, resulting in Monday’s losses. From 1.30% on Friday, the yield on 10-year Treasury notes fell to 1.181%, its lowest level since February. When bond prices rise, bond yields lower.
However, the Dow Jones Industrial Average took the biggest fall, dropping 725 points, or 2.1%, on Monday. This was the Dow’s worst day since a 943-point plunge in late October, and it was also the year’s most significant decrease. However, because of fears over the Covid-19 epidemic, the blue-chip market barometer has taken many more significant point drops since the start of 2020. Last year, the Dow dropped more than 1,000 points six times, with five of those market crashes occurring in March, at the onset of the pandemic in America. Jerome Powell, Federal Reserve Chairman, has hinted that the central bank should go in and reverse specific ultra-accommodating monetary measures to stop inflation since the epidemic still needs to recover more thoroughly.
Oil prices in the United States have tumbled downward as much as 8%, as OPEC prepares to increase output.
Sunday, OPEC+ (Organization of the Petroleum Exporting Countries) and allied nations agreed to ultimately lift the output ceilings on five countries, bringing an end to a previous disagreement over global energy prices caused by the United Arab Emirates. The dispute, driven by a UAE demand for a higher production rate, momentarily interrupted a previous meeting. It was concluded on Sunday that Iraq, Kuwait, Russia, Saudi Arabia, and the United Arab Emirates would see their boundaries increase.
Oil prices then started to fall more than 2% on Monday afternoon during Asia hours after OPEC and its allies agreed to end oil production cuts. U.S. crude oil futures fell 2.09% to $70.31 per barrel. Having a deal is “better than no deal” for OPEC+, according to an oil analyst who said a continued stalemate could mean rising production and plunging prices. Marathon Oil (MRO) and Diamondback Energy (FANG), both energy companies, are down more than 5%. The shares of Exxon Mobil (XOM) sank 3.4% to $55.35, Chevron (CVX) fell 2.7% to $95.97, and Occidental Petroleum (OXY) fell 4.3% to $24.82.
As part of a plan to phase out production cutbacks of approximately 5.8 million barrels per day by September 2022, the group decided to raise output by 400,000 barrels per day every month starting in August. It comes at a time when oil prices are nearing their highest levels in over two years. Negotiations to boost output had previously stagnated when the United Arab Emirates rejected the group’s request to reverse the oil cutbacks. It has placed the industry and investors in uncertainty, with experts warning that prices would either skyrocket or plummet without a deal. Let’s hope this deal will lead to better outcomes for the oil and energy markets.
Where to invest $1,000 right now...
Before you consider buying Exxon, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not Exxon.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
Click here to watch his presentation, and decide for yourself...
But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
Click here to find out the name and ticker of Keith's #1 pick...
