Wednesday, September 8th, 2021
Investors are pulling back
Delta variant hits Wall Street again
The rapid spread of the delta variant is making US investors nervous, especially as the Fed is moving away from its ultra-loose monetary policy. The cryptocurrency exchange Coinbase is one of the losers. However, the announced takeover of a biopharmaceutical company caused a record price jump.
The US stock exchanges increased their previous day’s losses slightly. This time it also hit the technology-heavy Nasdaq, which had braced itself against the downward trend the day before. Economic worries and fears of rate hikes regained the upper hand. The spreading delta variant of the coronavirus is fueling fears that the economic recovery could be slowed. “The point is to assess the growth prospects of the US economy more cautiously,” said macro strategist Carsten Brzeski at ING.
Of the Dow Jones Index fell 0.2 percent to 35,031 points, S&P 500 and Nasdaq composite yielded 0.1 and 0.6 percent, respectively.
Despite the economic worries, there was increasing evidence that the US Federal Reserve could soon start normalizing its monetary policy: The President of the US Federal Reserve in St. Louis, James Bullard, affirmed that the Fed would gradually reduce its economic stimuli this year . He brushed aside doubts about job creation in the US economy by pointing out the high demand for workers. There are more vacancies than unemployed.
Takeover brings record price jump
Company news was again rare. Jumped under the small caps Kadmon by more than 71 percent after the French Sanofi announced the takeover of the biopharmaceutical company. Another transaction caused price movements: The Swedish Assa Abloy AB is buying a division of Spectrum Brands for $ 4.3 billion. Spectrum stocks climbed 17.8 percent.
The share of the chemical company Lyondellbasell turned 2.4 percent into the red. The company is evaluating strategic options for its refining business. Desk group lost 6 percent. The home builder will be completing fewer homes than planned due to supply chain issues. The placement of a larger block of shares depressed the papers of the IT security company McAfee by 8.7 percent. According to a report, the activist hedge fund is buying in Elliott Citrix Systems to, the papers rose by 3 percent.
Bond yields are falling
On the bond market, the previous day’s sharp decline in prices recovered somewhat and yields fell. Traders spoke of a countermovement without a fundamental change in monetary policy speculation.
One of the losers on the US stock market was Coinbase. The US Securities and Exchange Commission is threatening a lawsuit against the cryptocurrency exchange. The trigger of the dispute is a planned Coinbase program, within the framework of which the owners of Bitcoin & Co lend them against interest. The authority considers such an offer according to the information as a security. Coinbase then postponed the start of its “Lend” program.
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