The latest Covid-19 case numbers for Los Angeles County are posted at Sameday Testing on Jul. 14, 2021. Covid-19 cases are on the rise in most states as the highly transmissible Delta variant has become the dominant strain in the U.S.
Getty Images
U.S. stocks were lower on Friday even after a better-than-expected retail sales report. Markets were also keeping close watch over developments around the fast-spreading Delta variant of the coronavirus that causes Covid-19.
Retail sales for June rose 0.6% from May, while economists had expected a decline of 0.4%. Sales had fallen 0.7% sequentially in May. Investors want affirmation that economic growth isn’t being meaningfully held back by supply shortages. Excluding autos, sales were up 1.3%.
In afternoon trading, the Dow Jones Industrial Average was down 94 points, or 0.3%, while the S&P 500 fell 0.2% and the Nasdaq Composite declined 0.1%. The indexes were gaining just after the opening bell, before they began retreating.
One contributing factor to the market weakness was that, beneath the surface, retail sales weren’t so impressive. Real spending, which strips out inflation and only accounts for sales volumes, fell 1.3% over May’s number, according to Mizuho economists. “The implication for real GDP is a sharp deceleration in real goods consumption,” writes Alex Pelle, U.S. economist. “Growth momentum likely peaked in the March-April period.”
The bond market was signaling a similar message. The yield curve flattened, meaning longer-dated bond yields were not moving much, while short-term yields rose, indicating the market envisions slower long-term economic growth and Federal Reserve interest rate hikes in the next year or two. The 10-year Treasury yield was little changed, at 1.31%, while the 2-year yield rose to as high as 0.25% from 0.23%, before falling back down to that level. “What the market is telling you with this big curve flattener is if the Fed has to step in sooner, then we’re not going to have robust growth in the longer term.”
The Nikkei 225 index fell 0.9% after the Bank of Japan trimmed its growth forecast for the year to 3.8% from 4%. The central bank also pledged to provide zero-rate loans to commercial banks to help companies fund climate-change projects. Much of the Asian region was steeped in red as concerns over spreading Covid-19 cases weighed, with China’s CSI 300 index closing down 1.1%.
U.S. President Joe Biden was on Friday due to join Pacific Rim leaders, including his Chinese counterpart Xi Jinping and Russian President Vladimir Putin, in a virtual meeting to develop strategies to help economies rebound from the resurgent Covid-19 pandemic.
Rising cases across the U.S. as well have forced officials in the country’s biggest county of Los Angeles to reinstate an indoor mask mandate even for the fully vaccinated, which will come into effect as of Saturday.
European stock indexes were modestly lower as Germany, the euro-area’s biggest economy, is struggling to cope with devastating flooding in the western part of the country that has left more than 80 dead and hundreds missing. The flooding has affected the neighboring countries of Belgium and Luxembourg as well.
Shares of Moderna (ticker: MRNA) were up 18.2% after news late Thursday that the biotech, which has produced a highly effective Covid-19 vaccine, will join the S&P 500 index, replacing Alexion Pharmaceuticals (ALXN) on Jul. 21.
Shares of Intel (INTC) initially rose before falling 0.3%. The heavily weighted semiconductor group is reportedly in talks to buy contract chip maker Globalfoundries for $30 billion, according to The Wall Street Journal.
Shares of Ericsson (ERIC) dropped 10.3%. The telecommunications-equipment company announced an $8.3 billion multiyear 5G deal with Verizon Communications and posted a forecast-beating, second-quarter net profit that beat expectations, but reported weaker sales in China.
Ericsson previously warned that Sweden’s ban on certain Chinese gear could result in some retaliation, and said it is now “prudent to forecast a materially lower market share in mainland China for networks and digital services.”
Alcoa (AA) stock fell 3.7% after the aluminum producer reported a profit of $1.49 a share, beating estimates for $1.29 a share. Sales were $2.83 billion, above expectations for $2.65 billion.
Cummins (CMI) stock fell 0.05% even after getting upgraded to Outperform from Market Perform at Cowen.
Olin (OLN) stock fell 0.5% even after getting upgraded to Buy from Neutral.
Zoetis (ZTS) stock dropped 0.2%. Raymond James downgraded the shares to Market Perform from Outperform.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com
stock market investing and crypto investing. Come for business consultations with us. Our phone number is 804-349-6199
All business plans created are tailored to the client's strengths and weaknesses after a full market research is done for the business and locations that it is profitable for you. please feel free to contact me. 804-349-6199
from WordPress https://ift.tt/3xLBqYq
via IFTTT
No comments:
Post a Comment