Equity, oil prices and US Treasury yields all fall due to fear of COVID-19 variant

Washington / London — Stocks plunged on Wall Street on Friday, reopening after Thanksgiving, but European stocks sold out the most in 17 months, and concerns over new coronavirus variants keep investors safe. Oil prices fell by $ 10 per barrel because of the rush sent-Shelter assets.

On Friday, the World Health Organization (WHO) designated the new COVID-19 mutant detected in South Africa as a “concern” and designated the fifth mutant.

Informally, the Dow Jones Industrial Average fell 2.53% to 34,899.34, the highest rate of decline in more than a year. The S & P 500 fell 2.27%, the worst day since February 25, and the Nasdaq Composite fell 2.23%. This is the largest one-day route in two months.

The US market closed early on Friday after being closed all day on Thursday for Thanksgiving holidays.

The benchmark STOXX 600 index fell 3.7% on the day and 4.5% for the week. Volatility gauges in major stock markets peaked in almost 10 months.

This year, all companies that have benefited from COVID-related deregulation, such as AMC Entertainment, airplane engine maker Rolls-Royce, easyJet, United Airlines and Carnival Corporation, went bankrupt.

Retailers have fallen as Black Friday, the beginning of the holiday shopping season, has begun. The new variation has fueled concerns about reduced store traffic and inventory issues.

In Europe, the travel and leisure index has plummeted 8.8% on the worst days since the COVID-19 shock sold out in March 2020.

Greg Basque, Chief Executive Officer of AXS Investments in Port Chester, NY, said:

“We’ve talked about the four or five factors driving activity in recent months (inflation concerns, some economic data, Fed policies), but last year we saw a lot about COVID. It’s progress. It obscures some of these other factors to a large extent, which drives market activity today. “

Little is known about the mutations detected in South Africa, Botswana, and Hong Kong, but scientists have found that it has an unusual combination of mutations that can evade an immune response or make the virus more contagious. He said he might be able to.

The UK said the new variety is the most important variety to date and one of several countries that impose a travel ban on southern Africa.

The European Commission also said it would consider suspending travel from countries where new variants were identified, but WHO warned against urgent imposition of such restrictions.

Global stocks fell 1.81%, the biggest drop in more than a year. France’s CAC 40 fell 4.8%. The UK’s FTSE 100 fell 3.6%, Germany’s DAX fell 4.2%, and Spain’s IBEX fell 5.0%.

Malaysian rubber glove maker Supermax, which surged 1500 percent during the first wave of the pandemic, jumped 15 percent.

MSCI’s non-Japanese Asian equities index fell 2.44%, the sharpest drop since late July.

In commodities, oil prices have plummeted. Gold prices have reversed the previous rise seen as they moved away from more risky assets.

US crude oil fell 12% to $ 69.02 a barrel by 1:21 pm Eastern Standard Time (1812 Greenwich Mean Time). Brent crude fell 10.5% to $ 73.59.

Spot gold prices have fallen 0.09%.

The Japanese yen rose 1.87% against the greenback as investors soared in search of safe assets, while Sterling rose 0.08% on the day to trade at $ 1.3331.

The dollar index fell 0.757% and the euro rose 1% to $ 1.1318.

Yields on US Treasuries have recorded the sharpest decline since the beginning of the pandemic. The Treasury benchmark 10-year bond finally rose to generate 1.4867 percent. Two-year bonds finally rose from 0.644 percent to 0.4941 percent.

Keith Lerner, Co-Chief Investment Officer of Truist Advisory Services, said: “The main reason for the sale was yesterday’s announcement of the new COVID-19 variant in South Africa, and investors are concerned that it could put pressure on economic growth.”

Market volatility is backed by already growing concerns about the outbreak of COVID-19, which drives restrictions on movement and activity inside and outside Europe.

Despite rising inflationary concerns, the market was previously bright about the strength of the economic recovery.

Chris Prentice and Carolyn Corn