Down plunges, Global markets tremble as new Covid-19 variant found in South Africa spooks the streets!

Global markets tremble as new Covid-19 variant found News

U.S. stock futures dropped in early morning trading today as investors were wary of the new covid variant. Futures for the Dow Jones Industrial Average dived 800 points. Not only this, S&P 500 and Nasdaq 100 were also negative.

Asian markets were also hit by today’s trade. Japan’s Nikkei, Hong Kong’s Hang Seng, India’s Sensex all dropped more than 2%. The final weeks of the year are usually a strong period with the famous Santa Claus rally. 

This week marks the start of the holiday shopping season, thus, the data will help investors understand consumer demands. The S&P 500 has already grossed 25% this year. As retail stocks witnessed drastic moves in both directions during this earning season.

What made the markets fall, and how real is the threat?

The markets dived owing to the latest release by WHO on Thursday. WHO officials warned off a new Covid-19 variant found in South Africa. The UK is one of the first to respond, suspended flights from 6 South African countries.

During the flight to safety, bond yields also plummeted. The yield on the benchmark U.S. 10-year Treasury note dropped to 1.5380%. This sharp reversal after a jump of 1.65% this week is not a good signal for Wall Street. Bond yields are inversely related to prices, so the impact may not be short-term.

Also, oil prices tumbled, with U.S. crude futures down to $73.57 per barrel, almost 6.2%. Along with the fall in other markets and the growing tension between US and China over trade. All these factors along with raising inflation costs are not a good sign for the markets.

What happens next, is the dream run for the markets over?

The dynamic rally witnessed in markets over the globe this year, was always considered to be nothing less than a dream run. And all dreams come to an end, with markets facing correction moves, one shouldn’t wander too much about a crisis-rising theory.

Analysts believe this year’s end will have a dynamic rally packed for us. As this trend is rarely witnessed, owing to the market’s movement this year, it is possible. 

There is still no concrete news over how dangerous the new strain is, and if it i=has spread or poses a large-scale threat. News is unraveling, thus, we advise you not to take decisive investment decisions and stay safe!

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