Ports and freight yards are vulnerable and could be shut by new, localized outbreaks. Investors are worried that the supply chain issues that have impacted global markets for months will worsen. health officials said Merck’s experimental treatment of COVID-19 was effective, data showed the pill was not as effective at keeping patients out of the hospital as originally thought. Pfizer shares rose more than 6% while Moderna shares jumped more than 20%. The coronavirus vaccine manufacturers were among the biggest beneficiaries of the emergence of this new variant and the subsequent investor reaction. One sign of Wall Street’s anxiety was the VIX, the market’s measurement of volatility that is sometimes referred to as its “fear gauge.” The VIX jumped 53.6% to a reading of 28.54, its highest reading since January before the vaccines began to be widely distributed.įearful of more lockdowns and travel bans, investors moved money into companies that largely benefited from previous waves, like Zoom Communications for meetings or Peloton for at-home exercise equipment. The digital currency dropped 8.4% to $54,179, according to CoinDesk. Bill Gates wants his donations to erase him from world's richest list 3-hour lines, lost bags: Air travel in Europe is a mess How many phone numbers do you know by heart? Turns out we can't recall Do not go to Disneyland or Disney World without doing this one thing The Daily Money delivers our top personal finance stories to your inboxĮven Bitcoin got caught up in the selling.
Social Security may get 10.5% raise in 2023. “At the least, (the virus) is likely to continue throwing sand in the gears of the global economy in 2022, restraining the recovery (and) keeping kinks in the supply chain.” “COVID had seemingly been put in the rear-view mirror by financial markets until recently,” Douglas Porter, chief economist at BMO Capital Markets. Airline stocks were quickly sold off, with United Airlines dropping 9.6% and American Airlines falling 8.8%. Flights between South Africa and Europe were being subject to quarantine or being shut down altogether. The economic impacts of this variant are already being felt. It’s been nearly two years since COVID-19 emerged, killing more than 5 million people around the globe so far.Ĭases of the new variant were found in Hong Kong, Belgium and Tel Aviv as well as major South African cities like Johannesburg. throughout the summer – and investors, public officials and the general public are jittery about any new variant that’s spreading. He notes that so-called core inflation, which excludes volatile food and energy prices, declined slightly in May even as the broader Consumer Price Index rose.There have been other variants of the coronavirus – the delta variant devastated much of the U.S. He still expects inflation to dip later this year, noting that the price of products like smartphones and TVs have started to decline. Mark Haefele, chief investment officer of global wealth management at UBS, has a more benign view. "It's still too early to say a recession is definitely coming in the U.S., but a 'hard landing' seems very hard to avoid at this point given the way inflation is still rising," the chief market analyst said. "In our view, achieving such a 'soft landing' looks very unlikely given the degree of monetary tightening needed to combat the seemingly endless stream of inflationary shocks and rising inflation expectations," they added.Ĭhris Beauchamp at IG, expressed similar doubts in a research note. "With the recent inflation data providing no 'clear and convincing evidence' that inflationary pressures will recede without stronger policy actions, the challenge for monetary policymakers of guiding inflation back to target without depressing demand to the point of triggering a recession has gotten that much more difficult," analysts with Deutsche Bank told investors in a research note.
Some Wall Street analysts think the pace of monetary tightening is likely to tip the economy into a recession. Federal Reserve officials are scheduled to meet this week for their policy meeting, and investors expect them to raise interest rates at least half a percentage point in a bid to rein in inflation.
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