After Delta Air Lines promoted a global retreat, Wall Street stocks rebounded
Wall Street stocks recovered their lost ground from the global economic downturn in the previous trading day. Investors got rid of their cautious attitude towards the spread of the Delta coronavirus variant and refocused on economic growth.
The Standard & Poor’s 500 Index rose 1.2% and fell 1.6% on Monday, the biggest drop in more than two months. The technology-focused Nasdaq Composite Index rose 1%, and the Stoxx Europe 600 Index rose 0.8%.
The correction in global stock markets on Monday broke the long-term calm. The stock markets mostly moved higher, spurred by the Covid-19 vaccine, central bank monetary stimulus measures, and US President Joe Biden’s trillion-dollar government spending plan.
The sell-off is caused by the highly spreadable Delta strain The new society limits men Asia-Pacific countries that appeared to have contained the virus before, and concerns about lowering the vaccination rate in the United States have intensified.
However, in view of the estimated annual growth rate of US GDP in the second quarter of 9%, many investors are still optimistic about the company’s prospects. On Tuesday, banks, energy companies and industrial stocks led the Wall Street stock market gains.
Marija Veitmane, senior multi-asset strategist at State Street Global Markets, said: “The underlying factors driving the market in the first half of the year are still there.” “Economic recovery, better returns, super loose monetary policy, and large amounts of funds from savings and cheap borrowing. Everything is still there.”
Outside the stock market, cautious mood lingers. The yield on the benchmark 10-year US Treasury note stabilized at 1.189% on Tuesday, after hitting its lowest point since February on the previous trading day. The U.S. dollar index, which measures the U.S. dollar against major currencies, rose 0.2%, and tends to strengthen during periods of market pressure.
The pound fell 0.7% against the U.S. dollar on Monday as the rate of delta variants in the UK soared. The pound fell further by 0.5% to $1.3604, the lowest level since mid-January.
Brent crude oil rose 0.3% to US$68.87 per barrel, and fell nearly 7% on Monday as producers’ organization OPEC+ intensified pandemic-related anxiety Agreed to increase production 400,000 barrels per day are added every month.
Goldman Sachs strategists wrote in a research report: “We believe that the current pessimism may persist in the short term.”
“The growing optimism has faded,” they warned, citing China’s economic slowdown, Worried that the Fed will respond to rising inflation by reducing its monthly bond purchases of $120 billion and “recent increase in Covid-19-related interference”.
Ross Mayfield, investment strategist at RW Baird, added that the stock market may remain sensitive to bad news about infection rates and vaccination progress.
“The market has been pricing something close to perfect,” said, “Investors are now studying this pandemic is something we will learn to endure, and it will prevent reopening as the grand party we all hope for.”