- US equity indices post losses, Treasury yields refresh multi-day low.
- Virus variants raise concerns over the economic recovery, US Jobless Claims exert additional downside pressure.
- US-listed Chinese stock dropped sharply as Beijing added to the shareholder’s woes.
US stocks portrayed sober market sentiment with notable daily losses for Thursday. Underneath the risk aversion was the fears of the coronavirus (COVID-19) variants and a higher US Jobless Claims data, not to forget the European Central Bank (ECB) move to alter the inflation target.
That said, Dow Jones Industrial Average (DJI) declined 0.75%, or 259.86 points, to 34,421.93 whereas S&P 500 Futures also marked a -0.86% downside with a daily loss of 37.31points to 4,320.82. Further, Nasdaq weakened 0.72% with a drop of 105.30 points to 14,559.80 by the end of Thursday’s North American session.
A study found over 52% of the latest two-week covid cases in the US were relating to the Delta variant. This joined chatters that virus strains resist vaccines to magnify market concerns. To convey the same, Atlanta Federal Reserve President Raphael Bostic said, per Reuters, “A new rise in coronavirus infections driven by the more virulent Delta variant could cause consumers to ‘pull back’ and slow the US recovery.”
Elsewhere, US Jobless Claims rose past 350K forecast and 371K revised the previous readout to 373K for the week ended on July 02. On a four-week basis, the unemployment claim figure eased below 394.75 to 394.5.
Despite the risk-off mood, the US Treasury yields refreshed multi-day low as the 10-year coupled dropped to fresh low since late February whereas 30-year coupon tested the lowest levels in five months.
While the sour sentiment dragged equities at home, Chinese shares on the American bourses had an additional reason to drop. Following Beijing's crackdown on DIDI, due to the alleged collection of customer data against national laws, the dragon nation widened hardships for their stocks on the US exchanges, taking down shares of Alibaba and Baidu.
Looking forward, a light calendar and the prevalent dominance of the coronavirus (COVID-19) headlines, investors may pay more attention to the qualitative catalysts for near-term trade direction.
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