Wall Street Plunges As COVID-Delta Variant Wears Marsh Revenue Worries; Robinhood seeks $ 35 billion valuation
Stocks fell on Monday, pushing Wall Street benchmarks lower even as second-quarter results reflect a strengthening economic rebound, amid growing concerns about inflation and the resurgence of new COVID-infections. 19 shook investors.
This week’s revenue bundle will feature industry leaders like Netflix (NFLX) and Johnson & Johnson (JNJ), providing a more complete picture of where businesses stand as more sectors of the economy have reopened in spring and early summer. All eyes will also be on Robinhood, the newcomer to retail, who filed his prospectus Monday morning for a valuation of $ 35 billion. The platform is targeting a capital increase of $ 2 billion and aims to price the stock in a range of $ 38 to $ 42 per share.
But in early trades, fears of a resurgence in coronavirus cases drove the S&P 500 to the steepest drop in two months and sent benchmark yields to their steepest drop in more than 3 months.
Last week, the major benchmarks abandoned their early gains and closed in the red as traders digested a slew of earnings results and June consumer spending data that blew expectations. However, an impression on consumer sentiment disappointed, hinting at mounting price pressures that could derail the recovery.
In Monday’s European session, stock markets sank as the UK celebrated its ‘Freedom Day’, which ironically began with the Prime Minister and Chancellor having to go into self-isolation after being told they were came into contact with someone who tested positive for COVID-19.
The incident refocused attention on the Delta variant, which is causing a wave of new cases in the United States, and sent the 10-year Treasury bond (TNX) yield to its lowest level since early March. In Los Angeles, indoor masking requirements are back, with other regions considering similar measures.
“Fears that the Delta mutation will slow or even reverse recovery efforts appear to be sapping appetite for risk taking,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
Last week, Federal Reserve Chairman Jerome Powell suggested that it was still too early for the central bank to step in and slow down some ultra-accommodative monetary policies to contain inflation, given that the labor market and other areas of the economy still need to recover. fully from the pandemic.
“The makeup of recent data suggests that inflation will be largely transient as the Fed has said,” Ryan Detrick, chief markets strategist at LPL Financial, said in a note to clients last week.
“The big question is how much ‘transient’ time will last. We’re in the middle of the season where we expected to see some hot impressions, so this week hasn’t necessarily been a surprise, ”added Detrick. “But with each report that passes, market participants will be increasingly anxious to see these numbers start to moderate. . “
Against a backdrop of strong demand and price increases, Corporate America continues to surprise investors on the upside with second quarter results. About 8% of S&P 500 companies have released results so far, mostly banks. Of those who reported, 85% exceeded estimates, according to FactSet data.
Banks such as Bank of America (BAC), JPMorgan Chase (JPM) and Morgan Stanley (MS) have beaten consensus estimates, but have also shown signs of slowing growth under the hood in business segments of base, as demand for loans and fixed income trading was getting lighter than expected.
Late Sunday, Zoom (ZM) – the company that has become synonymous with remote working during COVID-19 lockdowns – announced a $ 15 billion stock deal to buy cloud provider Five9. The video communications star faces increased competition from Facebook (FB) and Google (GOOG), both of which are increasing their video capabilities.
Meanwhile, Wall Street is cautiously considering a growing resurgence in COVID-19 infections, as the Delta variant takes hold. Los Angeles last week relaunched its indoor masking policy amid a surge in new coronavirus diagnoses, and as the number of cases in the United States hit a three-month high – pointing out to how much the mass vaccination effort seems to have lost momentum.
9:30 a.m. ET: stocks open lower
Here is where the main indicators were trading at the opening bell
S&P 500 (^ GSPC): 4 276.64, -50.52 (-1.17%)
Dow (^ DJI): 34 238.96 -448.89 (-1.29%)
Nasdaq (^ IXIC): 14,235.50, -191.74 (-1.33%)
Gross (CL = F): $69.13 per barrel, -2.68 $ (-3.73%)
Gold (CG = F): $1,813.80 per ounce, – $ 1.20 (-0.07%)
10-year cash flow (^ TNX): -0.085, assignor 1.215%
Monday at 7 a.m. ET: Stock futures tumble as earnings season picks up
Here are the main moves in the markets at 7:01 a.m. ET:
S&P 500 Futures Contracts (ES = F): 4,284.25, -34.25 (-0.79%)
Dow Futures (YM = F): 34 188.00, -376.00 (-1.09%)
Nasdaq Futures (NQ = F): 14,614.75, -55.75 (-0.38%)
Gross (CL = F): $69.85 per barrel, – $ 1.96 (-2.73%)
Gold (CG = F): 1,803.10 per ounce, -11.90 $ (-0.66%)
10-year cash flow (^ TNX): return of 1.24%, the lowest since March 4
Javier David is editor-in-chief for Yahoo Finance. Follow Javier on Twitter: @TeflonGeek
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