(mtag101702) Author: Dhirendra Tripathi
investing. com – Investors on Thursday shied away from risk as escalating Covid-19 events swept the US and UK and threatened to stall the progress of the economic recovery.
The 10-year U.S. Treasury yield fell to its lowest level since February before recovering somewhat. Rates of return move on the opposite side with prices. The latest bearish movements in rates have come on a base where expectations for an increase in economic activity and growth have dimmed, forcing investors to exit bear bets on bonds.
The growth outlook has also been marred by an increase in incident numbers as the delta variant, first discovered in India, continues to spread. US public health officials urged communities with low vaccination rates to get vaccinated.
While falling bond yields were normally smooth for tech shares, not so much on Thursday. Facebook (NASDAQ: FB
(mtag101708)) and Microsoft (NASDAQ: MSFT) suffered a decline.
Shares sensitive to cryptocurrencies were also affected by the drop in bitcoin.
Three developments that are expected to affect the markets today:
1. bond yields
Eyes on the Treasury market. 10 years USA
The indicator fell to 1.25% on Thursday as concerns over the pace of recovery in the global economy escalated and led investors to safe havens.
Although vaccination accelerates and people return to work and travel, the rapidly spreading delta variant is giving politicians, bankers and economists a headache in balancing growth and inflation goals.
Japan declared a state of wonder in Tokyo.
2. power shares
While concerns for global economic growth are revived, power shares are also weak. Chevron
(mtag101708) Corp (NYSE: CVX), Exxon Portable
(mtag101708) Corp (NYSE: XOM) and Royal Dutch Shell (LON: RDSa) PLC ADR (NYSE: RDSa), in the middle of names that feel the pressure.
Crude oil rose. After the stock report showed a decrease in stocks last week, WTI
(mtag1017008) While it is processing around $73 Brent was bought at $74.
3. Is the madness over?
AMC Entertainment Holdings Inc (NYSE: AMC) and GameStop Corp.
(mtag101708) (NYSE: GME) shares were only able to rebound in the afternoon after falling on Thursday. However, more volatility is expected as investors debate whether the rally in popular stocks is over.
AMC hit 52-week highs at $72.62 on June 2, and has since dropped to around $47. This decline was also fueled by the disappointment of investors in the fixed fund increase. Two days ago, the company canceled, for example, a 25 million share sale.