Dow Today – Dow to drop 500 points as Covid concerns resurface
BY THE NUMBERS
Dow futures on Thursday fell nearly 500 points, or more than 1.3%, in a broad premarket decline as Japan declared a state of emergency in Tokyo for the upcoming Summer Olympics and as countries deal with a rebound in Covid cases due to variants. Futures tied to the S&P 500 and Nasdaq also dropped about 1.3% each. (CNBC)
* Bitcoin, ether tumble as investors take off risk amid global markets slide (CNBC)
* Oil prices fell for a third day as OPEC+ uncertainty persists (Reuters)
* Softer dollar, slump in yields extends gold’s rally (Reuters)
Thursday’s selling came one day after Wall Street’s rally had resumed, with the S&P 500 and Nasdaq finishing at record high closes. The Dow Jones Industrial Average ended 0.3% shy of Friday’s record close.
Investors rotated into the perceived safety of bonds Thursday, pushing the 10-year Treasury yield below 1.26% to the lowest since late February. Bond yields move inversely to prices. Despite the strengthening economy and hotter inflation, the 10-year yield continues to decline. (CNBC)
The government Thursday morning said initial jobless claims for last week totaled a worse-than-expected 373,000. That’s up slightly from the upwardly revised pandemic-era low the previous week. The level of continuing claims decreased to 3.34 million, down 145,000 from the previous week’s revised level. (CNBC)
IN THE NEWS TODAY
Just two weeks before the Tokyo Olympics, Japan’s prime minister on Thursday announced the state of emergency for the capital city due to rising Covid infections. The order goes into effect this coming Monday and through Aug. 22. That means the Olympics, opening on July 23 and running through Aug. 8, will be held entirely under emergency measures. (AP)
While fans from abroad were banned months ago, Olympics officials had recently set venue limits at 50% capacity for local spectators. However, the state of emergency could force another change in the fan policy.
The global death toll from Covid exceeded 4 million late Wednesday as infections worldwide crossed 185 million, according to data compiled by Johns Hopkins University. In recent months, many countries are battling a surge in Covid infections due to the spread of the more transmissible delta variant, which first emerged in India. (CNBC)
The delta strain now accounts for more than half of new Covid cases in the U.S. The World Health Organization has said that delta is the “fastest and fittest” variant yet, and health experts have warned it could undermine efforts to contain Covid even as vaccination campaigns are underway around the globe. (CNBC)
State attorneys general are again going after Google with an antitrust lawsuit, this time alleging the Alphabet unit abused its power over app developers through its Play Store on Android. The case marks the fourth antitrust lawsuit lodged against the company by U.S. government enforcers in the past year. (CNBC)
STOCKS TO WATCH
Bank of America ((BA)C), JPMorgan (JPM): Bank stocks were under pressure on Thursday morning amid growing concern about the pace of the economic recovery. Shares of JPMorgan Chase slipped 2.6%, while Bank of America dropped 2.9%. Banks and other financials are typically viewed as cyclical stocks whose performance is tied to the path of the economy.
Charles Schwab (SCHW): Shares of the brokerage firm fell 3% after Goldman Sachs downgraded the stock to neutral from buy. Goldman said in a note that Schwab had limited near-term upside after the retail trading boom helped to fuel outperformance for the stock in the first half.
Didi Global (DIDI): The slide of the Chinese ride-hailing app’s stock continued on Thursday morning as investors grapple with the crackdown from the country’s regulators on digital companies. Shares were down more than 6% in premarket trading, building on losses of 19.6% on Tuesday and 4.6% on Wednesday.
Advanced Micro Devices (AMD), Nvidia ((NVDA)): Concerns about global growth appeared to be weighing on the chip sector on Thursday morning. Shares of Advanced Micro Devices and Nvidia each retreated more than 2% in premarket trading despite receiving bullish analyst notes from Goldman Sachs and Oppenheimer, respectively.
Occidental Petroleum (OXY): Energy stocks fell in premarket trading as the price of oil declined, hit by concerns about global growth and uncertainty about the direction of OPEC policy moving forward. Shares of Occidental Petroleum dropped 3%, while Exxon Mobil slipped 1.8%.
Coinbase (COIN): Shares of the cryptocurrency exchange slide 5% in premarket trading as crypto markets sold off. The price of bitcoin fell nearly 6% and was trading below $33,000 per coin on Thursday morning.