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New Covid-19 Strain, Markets Tumble, Black Friday - What's Moving Markets

EconomyNov 26, 2021 06:27AM ET
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© Reuters

By Geoffrey Smith 

Investing.com -- Risk assets around the world tumble after South Africa identified a new strain of heavily-mutated Covid-19 virus which appears to have driven out the delta variant in the regions where it has been located. The WHO will hold an emergency meeting to determine whether it represents a variant 'of concern'. Equities, emerging market currencies, crypto and oil are among the hardest hit asset classes. The news puts an extra shadow over this year's Black Friday. Here's what you need to know in financial markets on Friday, 26th November.

1. New Covid-19 strain identified

Health authorities in South Africa identified a new strain of the Covid-19 virus, triggering fears that it may be able to avoid the defenses of the current generation of vaccines.

The new strain, known as 1.1.529, quickly became the dominant one in those regions of South Africa where it was identified. The World Health Organization has convened an emergency meeting for Friday to discuss whether the strain constitutes a variant of concern. If so, it will be given the name of the Greek letter ‘nu’.

Incidences of the strain have already been identified in Hong Kong, in both cases in patients who had recently travelled to southern Africa. It is not clear yet whether the disease is more dangerous to humans than the delta variant. However, the emergence of a new strain at a time when cases are already at record highs in Europe is likely to raise the risk of longer and more severe restrictions.

2. Markets tumble on fears of new lockdown wave

Risk assets around the world took the news badly, with European stock indices falling over 4% in some cases before steadying a little.

In equities, the familiar pattern of pandemic trading reasserted itself quickly, with travel and hospitality stocks faring worst and health and e-commerce stocks outperforming.  In foreign exchange, haven currencies such as the yen and Swiss franc outperformed, while the dollar surged against commodity currencies and sterling, which was forced into yet another sharp repricing of interest rate risk. 

Crypto currencies also suffered due to forced liquidations. By 6:30 AM ET, Bitcoin had fallen 5.4% to a seven-week low, while Ethereum fell 6.9%, Dogecoin fell 7.8% and Cardano fell 6.2%.

3. U.S. stocks set for sharp sell-off

U.S. stock markets are set to open sharply lower later, with low liquidity exacerbating the size of the moves. All stocks travel-related are set to open under pressure, with Boeing (NYSE:BA) down 6.4% in premarket, AirBNB stock down 6.9% and Marriott stock down 7.2%. Airline and cruise line stocks are, inevitably, faring worst, down between 7% and 12%.

By 6:15 AM ET, Dow Jones Futures were down 812 points, or 2.3%, while S&P 500 Futures were down 1.9% and Nasdaq 100 Futures were down 1.3%.

The news also fit financial stocks, in reducing the chances of an early interest rate hike by the Federal Reserve. The biggest winners were those early pandemic trades that have been shorted aggressively as the economic outlook brightened in recent months, such as Zoom Video  (NASDAQ:ZM) stock and Peloton  (NASDAQ:PTON) stock.

4. Black Friday prospects hit 

The new Covid-19 has cast another shadow over what was already threatening to be another subdued Black Friday for retailers, perhaps making people think twice before running down cash balances any further.

With many stores having stayed closed on Thursday and others reluctant to encourage crowds of shoppers to pack into stores, it’s not at all clear how the coming weekend for sales will shape up relative to previous ones. Various retailers, especially in fashion, saw their stocks plunge after warning of inventory shortages and supply chain constraints in their September/October quarter earnings, and the Wall Street Journal cited Adobe (NASDAQ:ADBE) data on Friday suggesting that digital ‘out of stock’ messages are up more than 260% from their levels of two years ago.

Black Friday comes this year at a time when retail sales growth is showing signs of fatigue, after months in which U.S. consumers have run down pandemic-induced savings. Personal spending still remained strong in October, however, rising 1.3% on the month, its biggest monthly increase since March.

5. Oil slides on fears of fresh setback to air travel

Crude oil was also on course for its worst day since July in response to the news, amid revived fears that mobility restrictions will hit a tentatively recovering air travel market and maybe more local travel too.

The rebound in air travel is a key component in 2022 demand growth forecasts, representing the only major part of oil demand which is still clearly lagging 2019 levels.

The European Union and U.K. have already suspended incoming flights from South Africa, while the U.K. ban extends to a handful of southern African states.

By 6:30 AM ET, U.S. crude futures were down 6.8% at $73.06 a barrel, having earlier hit a two-month low, while Brent crude futures were down 5.9% at $77.33 a barrel.

New Covid-19 Strain, Markets Tumble, Black Friday - What's Moving Markets
 

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Comments (21)
Pwr Strk
Pwr Strk Nov 26, 2021 10:12AM ET
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happy Fauci friday
MuraliKrishna Brahmandam
MuraliKrishna Brahmandam Nov 26, 2021 9:25AM ET
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what is black Monday?
Whaling Trawler
Whaling Trawler Nov 26, 2021 9:21AM ET
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lol lol
Joe Fred
Joe Fred Nov 26, 2021 9:15AM ET
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It’s almosf as if this was planned. News out on Thanksgiving day in US so no one is really paying attention until they check account balance on Monday, cause some panic, make people worry before Christmas. Now a great time to push more reckless spending to save the Holiday for everyone….never mind, no holiday gatherings again. It seems almost too coincidental already. Same thing happened this summer when people started feeling better about Covid and started complaining about inflation and politicians.
John Laurens
John Laurens Nov 26, 2021 9:03AM ET
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The vaccines were a mistake. China's little gift is gonna mutate until it nails every last one of us. Those jacked on vitamin D and zinc will survive.. the rest may not. Young people have no business messing around with this variant causing vaccine either. Young people should ride it out and gain the natural antibodies.. like my kids did. They are jacked up on the vitamins and know how to handle the virus. EVERY LAST ONE OF US ~ Mark my words..
taylor jason
taylor jason Nov 26, 2021 9:03AM ET
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thanks Dr Quack for your medical analysis
Miriam Morkhul
Miriam Morkhul Nov 26, 2021 9:03AM ET
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Are you aware of the abnormal record of heartattacks reported by a hospital in Scotland? Increase by 25%. Are you aware of the myocarditis wave in young boys? Are you aware of Airliners who canceled flights because of bloodclot risk in vaccinated pilots? Did you know the vaccines posed a risk of forming antibodies attacking Syncytin-1 protein, damaging ********production in men and womb integrity in women. This was mentioned in a warning letter to EU:s highest medical regulatory body (Ema or EMU?)
John Avenetti
John Avenetti Nov 26, 2021 9:03AM ET
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taylor jason you're the msm watching quack
Tom Scurlo
Tom Scurlo Nov 26, 2021 8:48AM ET
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Just another MSM talking point, so they don’t have to talk about the Senile Biden, or the maxwell case, or the 2020 stolen election evidence piling up, or Hunter/Joe Bidens China backdoir deals…. And to many numurous things to list.
Sean Livingstone
Sean Livingstone Nov 26, 2021 8:46AM ET
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If covid is from China, it won't spread this quickly to the world especially when it started the toughest lockdown in history. It is still under lockdown... The virus has to be from somewhere else.
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carol ruszin
carol ruszin Nov 26, 2021 8:46AM ET
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Africa
Sean Livingstone
Sean Livingstone Nov 26, 2021 8:46AM ET
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John Laurens Hi Trump. How's your tax evasion going?
Sean Livingstone
Sean Livingstone Nov 26, 2021 8:46AM ET
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John Laurens How's life tax evading Trump?
Pwr Strk
Pwr Strk Nov 26, 2021 8:46AM ET
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it's a Fauci virus!!! what part of it do you not understand?!!!
Pwr Strk
Pwr Strk Nov 26, 2021 8:46AM ET
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it's a Fauci virus!!! what part of it do you not understand?!!!
Sean Livingstone
Sean Livingstone Nov 26, 2021 8:44AM ET
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If covid 19 is from China, it won't be spread to that many countries this quickly.
Tom Scurlo
Tom Scurlo Nov 26, 2021 8:40AM ET
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Someone “up and Farts in the wind”…. Down goes the market!!!!
Tyler Munro
Tyler Munro Nov 26, 2021 8:39AM ET
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covid is fake..
Mike ND
Mike ND Nov 26, 2021 8:32AM ET
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Thanks China
Jack Zydron
Jack Zydron Nov 26, 2021 8:30AM ET
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🤣🤣🤣🤣🤣
Jack Zydron
Jack Zydron Nov 26, 2021 8:29AM ET
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all green,
John Avenetti
John Avenetti Nov 26, 2021 8:28AM ET
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more than half of the population knows this is baloney
Lesko Brandon
Lesko Brandon Nov 26, 2021 7:31AM ET
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New vaccine-resistant COVID variant, brought to you by evolutionary pressure of mass vaccination including of low-risk individuals by vaccines that do not prevent you from spreading the virus. Here is some real COVID news: Aside from the most vaccinated places in the world having COVID outbreaks (including even within the US, places like CA and NY doing worse than places like FL and TX), a recent study in Europe has shown that over the past 6 months the per capita death rate of all causes among people under the age of 60 who are vaccinated is twice that of people under the age of 60 who are unvaccinated. Recent studies have also shown that vaccinated people are more likely to die from heart attacks than unvaccinated people. Children who are vaccinated are also put at substantially greater risk of cardiac adverse events than their risk from COVID.
taylor jason
taylor jason Nov 26, 2021 7:31AM ET
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fake news, check any legitimate website, death/cases per 100,000 is lower in NYC then it is in Florida/Texas so nice try spreading fake statistics.
Pwr Strk
Pwr Strk Nov 26, 2021 7:31AM ET
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it's a Fauci virus!
TheEnd IsNigh
TheEnd IsNigh Nov 26, 2021 7:25AM ET
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This world has gone mad. Historians will look back at this era as the time when humans committed economic su!c!de and destroyed an otherwise booming economy in 2019. We deserve the ******we've created.
Loudermilktits Loudermilktits
Loudermilktits Nov 26, 2021 7:25AM ET
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If economists are even a thing in the future lol
TheLast LoserDon
TheLast LoserDon Nov 26, 2021 7:25AM ET
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Yeah, I come to this website to get the best information about COVID-19 from these comments. NOT! There are lots of haters on here that failed 9th grade science but are offering their "broad knowledge" of infectious diseases and statistics. They do not listen to the doctors and scientists on any subject that their "Orange God and right wing media cronies" tell them otherwise.
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Tom Scurlo
Tom Scurlo Nov 26, 2021 7:25AM ET
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Lesko Brandon and the fact they he could keel overcdead any moment from his multiple jab shots!!!!
John Laurens
John Laurens Nov 26, 2021 7:25AM ET
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Your God Fauci is a lying sack of feces who helped fund China's creation of it.. You follow the left wing fascist "science" if you want to. I beat it twice already. The Delta was way easier than the first. The only way to get through this if you're not young, is to get healthy ASAP! Covid loves fat lazy people.
MA Hasan
MA Hasan Nov 26, 2021 7:25AM ET
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science is "left wing fascist" is a medieval idea getting popular in the US in the 21st century! how fast are we heading down the ditch of darkness and ignorance???
MA Hasan
MA Hasan Nov 26, 2021 7:25AM ET
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science is "left wing fascist" is a medieval idea getting popular in the US in the 21st century! how fast are we heading down the ditch of darkness and ignorance???
John Avenetti
John Avenetti Nov 26, 2021 7:25AM ET
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boy are you a dunce
Becca Turcotte
Becca Turcotte Nov 26, 2021 7:13AM ET
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all viruses are diseases but not all diseases are viruses, bacteria can cause diseases which is defined as damage to the cells by infection.
Joe Ramella
Joe Ramella Nov 26, 2021 6:56AM ET
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So now its a disease and not a virus?
Henry Emenike
Henry Emenike Nov 26, 2021 6:56AM ET
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hahahaha so funny
Bernard Makumba
Bernard Makumba Nov 26, 2021 6:56AM ET
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why so fun
Jason White
Jason White Nov 26, 2021 6:56AM ET
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Its a virus, that causes a disease. For example, the flu is a disease caused by a virus.
Corey DeLaplain
SniperSam Nov 26, 2021 6:56AM ET
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The fraudulent media will use whatever vocabulary words stoke the most fear!
John Avenetti
John Avenetti Nov 26, 2021 6:56AM ET
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keep moving the goalposts
Md Mahfujislam
Md Mahfujislam Nov 26, 2021 6:50AM ET
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yes
Matt Brackley
Matt Brackley Nov 26, 2021 6:50AM ET
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lol!
 
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