Shares, oil prices, and government bond rates all fell after South Africa issued a warning about a rapidly spreading new form of coronavirus, raising fears that travel limitations and other measures may stifle economic activity.
To 34899.34, The Dow Jones Industrial Average fell 905.04 points or 2.5%. It was the Dow's greatest percentage decrease in a single day since October 2020.
The S&P 500 fell 106.84 points, or 2.3%, to 4594.62, while the Nasdaq Composite dropped 353.57 points, or 2.2%, to 15491.66. All indices had their worst-ever Black Friday session. Due to the holiday, markets closed early.
U.S. crude fell 13% to $68.15. Traders feared that the lockdown would lower gasoline demand. Bitcoin, like other risky investments, also fell in price.
This is not good to see news of a worrying option on Black Friday morning, as Jessica Bemer, a portfolio manager at Easterly Investment Partners, commented.
Investors are reaching for safe-havens. The 10-year Treasury note yield fell to 1.484% from 1.644% before the Thanksgiving holiday, its lowest level since March 2020. Gold, considered a store of wealth amid falling risk assets, rose 0.1% to $1,785.30 a troy ounce.
The sell-off caused a jolt in markets that had been anchored by concerns about the coronavirus to a large degree.
Scientists say the new option dubbed B. 1.1.529, has many mutations that could make it more transmissible and allow it to bypass some immune responses caused by previous infection or vaccination.
Several nations have already implemented restrictions on travel to and from southern Africa. Investors were concerned that the burden might derail months of work of reviving the global economy and saving lives. Takeo Kamai, head of execution services at CLSA in Tokyo, stated, "For now, Covid is back on the table."
Investors appeared to be sticking to the game plan they devised early in the pandemic: selling travel companies and buying shares in home-based companies.
Delta Air Lines, United Airlines, and American Airlines Group fell 8% or more after Britain, Israel and Singapore restricted flights from southern Africa. Africa. The European Union has stated that it will recommend a halt to aviation flights from the region. Shares of cruise companies, including Royal Caribbean Group, fell in value, and Exxon Mobil slid 3.5%, or $2.23, to $61.25. Chevron lost $2.68, or 2.3%, to $114.51.
Moderna increased by 21%, or $56.24, to $329.63. Pfizer increased by 6.1%, or $3.11, to $54. Netflix and DoorDash, which previously profited from in-home orders, increased by 1.1% and 1.6%.
The World Health Organization said Friday that the new strain is "a variant of concern". The increase in cases of other strains has already prompted some European governments to tighten regulations for transport, stores, and workplaces.
Many investors in the United States had taken the day off, extending their Thanksgiving break. Ms. Bemer said that she had planned to work on Friday, though she was spending Thanksgiving with her family.
About 6.9 billion shares were traded on the New York Stock Exchange and Nasdaq combined. According to FactSet, the average Black Friday volume since 2007 has been 2.9 billion shares.
Oil prices have experienced their steepest drop yet. According to traders, money managers rushed to abandon bets that a mismatch between the limited supply and growing demand would boost crude prices to $100 a barrel. When the Organization of Petroleum Exporting Countries and a group of Russia-led allies meet next week, the slump may urge them to put off plans to produce extra oil.
"If the news is that the vaccination works on this, we're going back up. If the vaccines against it don't work, then good night Vienna," Blue Creek Capital Management's chief investment officer Adam Webb said.
Even if the new strain proves to be more resistant to vaccination than previous strains, money managers believe the economic harm might be limited anyway. MRSA vaccines, such as those produced by Pfizer and Moderna, can be updated fast, and companies have learned to adapt to deterrence measures, reducing the impact of each shutdown.
If a widespread lockdown were to resume, however, rising inflation might hinder central banks and governments from stimulating the economy.
Can policy respond and save markets and economies this time, given inflation? Supply chain problems caused by shutdowns might drive up prices even more, as Edward Smith, Rathbone Investment Management's co-chief investment officer, stated.
The stock markets throughout the world have plummeted. Stock losses in the tourism, entertainment, banking, and energy sectors - all of which had suffered during prior bouts of economic instability during the epidemic - caused the Stoxx Europe 600 Index to fall 3.7%, the strongest one-day percentage drop for a pan-continental indicator since June 2020.
In Asia, the Hang Seng Index in Hong Kong plummeted 2.7%, while the Nikkei 225 in Japan fell 2.5%. The Shanghai Composite Index in China lost 0.6%.
Shares of technology companies fell after Bloomberg’s report about China asked Didi Global to develop a plan to delist in the United States. The Wall Street Journal earlier reported that the ride-hailing titan was considering going private, in part to appease Chinese officials and that authorities had proposed to list it in Hong Kong.
After a volatile afternoon, stock futures opened marginally higher Monday evening, as investors considered the market effects of Federal Reserve Chairman Jerome Powell's re-nomination.Stocks
A US appellate court restored a countrywide mandatory vaccination COVID rule for major corporations on Friday, covering 80 million employees, leading critics to hurry to the Supreme Court to seek intervention.Banks and Finance