FirstFT: Delta variant disrupts global markets
The threat of the Delta coronavirus variant hit global stock markets on Monday, giving European stock exchanges their worst session of the year and pushing US stocks down more than 2%.
Commodity prices also fell, and investors moved towards the safe haven of government bonds. This helped push the yield on the 10-year Treasury bill to its lowest level in six months, prolonging a shift in investor sentiment as fears of soaring inflation gave way to rampant concerns about sustainability. of US growth, compounded by the spread of the Delta variant.
The region-wide Stoxx Europe 600 fell 2.3% in its biggest one-day price drop in 2021, with London’s FTSE 100 falling by the same amount. Across the Atlantic, the S&P 500 index lost more than 2% before moderating in afternoon trading to close 1.6% lower.
The tech-focused Nasdaq Composite fell 1.1%. In commodities, Brent crude, the international benchmark for oil, fell 7.1% to $ 68.38 per barrel.
The yield on the 10-year US Treasury bill – a benchmark for assets around the world – fell 0.10 percentage points to 1.19%, its lowest level since mid-February. German 10-year Bund yields fell to minus 0.39% and UK 10-year gilts fell to 0.56%, both from five-month lows.
Government bonds have been rallying for weeks as acute inflation concerns this year began to fade. But Monday’s moves mark a significant acceleration in the decline in yields and a change in tone as bond gains have been accompanied by a sell off in stocks.
“It is the market awareness that we are moving from a clear V-shaped recovery to something much more uncertain,” said Mohammed Kazmi, portfolio manager at Union Bancaire Privée. “The hope was that the vaccines would provide us with the end of the game. Now investors are watching the UK and there is a bit of fear that such an aggressive reopening when cases are still so high. “
Five other articles in the news
1. The United States accuses China of organizing cyber attacks around the world
The White House and its Western allies have accused the Chinese government of partnering with criminal gangs to carry out large-scale cyber attacks, including one against Microsoft this year that affected tens of thousands of organizations.
2. Biden: rising inflation will not jeopardize the US recovery Joe Biden has sought to allay fears that rising inflation could hurt the US recovery and undermine his $ 4 billion spending plans, saying the administration would remain vigilant in the face of rising prices and that he expected the Federal Reserve to take action if necessary.
3. Hong Kong companies fear being crushed between China and the United States U.S. business groups said a warning from the Biden administration about the risks of operating in Hong Kong made life more difficult as they navigated a sweeping Chinese security crackdown.
4. Tokyo Olympics affected by increase in Covid cases and scandals Tokyo’s dreams of trouble-free preparation for Friday’s Olympic opening ceremony were shattered by a count of Covid-19 infections, suspected rape, a bullying scandal and a missing weightlifter.
5. The Acting Prime Minister of Haiti agrees to step down
Haiti’s interim prime minister, who has ruled the country since the assassination of President Jovenel Moïse 12 days ago, has agreed to step down under diplomatic pressure and cede power to a rival.
Singapore has tightened social distancing restrictions after reporting the highest number of cases since August 2020.
The Centers for Disease Control and Prevention urged we citizens on Monday to avoid going to the UK, on the same day, England lifted all restrictions on social contact as part of Prime Minister Boris Johnson’s ‘Freedom Day’.
Canada will begin allowing fully vaccinated U.S. tourists to enter the country from early August and vaccinated travelers from other destinations a month later.
Brittany Prime Minister Boris Johnson said on Monday that individuals will have to show proof of two Covid-19 vaccines to enter nightclubs and other places where large groups gather.
the we is experiencing a “pandemic of the unvaccinated,” warned the head of the country’s main public health agency, as new cases of the coronavirus jumped 70% last week.
The day to come
Out of this world Amazon founder Jeff Bezos takes to space today, the anniversary of the first moon landing, with his younger brother Mark, aviator Wally Funk, 82, and Dutch student Oliver Daemen, 18 years.
Earnings Streaming giant Netflix, Philip Morris, UBS and Chipotle are announcing their results today.
Hearing on cybersecurity The US Energy and Trade Subcommittee meet today to examine the growing threat of ransomware, a day after the White House accused China of teaming up with criminal gangs to carry out large-scale cyber attacks.
What else do we read
Robotaxis: a “moonshot” solution for complete automation? Since Google launched its self-driving car project in 2009, the biggest question for the technology has been: can it be safe enough to be deployed on a large scale? Now the risk for robotaxis is not whether full autonomy can be successful, but whether they can be inexpensive enough to make a business case.
China far from achieving superpower status Global military might is what elevates nations to superpowers, but Beijing may not care about competing with the United States in this area, says Gideon Rachman.
Indian tech IPO boom to test investor appetite The Zomato food delivery app has kicked off a wave of IPOs by Indian start-ups hoping the crackdown on Chinese tech groups could prompt global investors to turn their attention to India’s tech offerings. .
Iranian sanctions The United States is consider sanctions on Iran’s oil sales to China, the country’s main customer, as negotiators seek to resurrect the 2015 nuclear deal. (The Wall Street Journal)
Two big reasons to doubt the global boom While economists expect the boom in reopening the global economy to roar over the next few quarters, there are two increasingly pressing reasons to question its strength and duration: China and United States. The two superpowers are the engines of global growth, but cracks are appearing in their economic engines, writes Ruchir Sharma.
Brazilian Lula keeps politics a secret Since returning to Brazilian politics in March, Luiz Inácio Lula da Silva’s popularity has steadily increased. But some Brazilians are wondering what a new Lula presidency might look like. He admitted that his ideas “change when the facts change”, and went from socialist trade union leader to head of a liberal economic administration in 2003.
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