Stocks, commodities decline amid growth worries - BNN

Stocks dropped, while Treasuries and the dollar rose amid concern about the withdrawal of Federal Reserve stimulus and growing anxiety around the coronavirus spread and global supply chains.

Friday’s options expiration also contributed to the heightened equity market swings. The S&P 500 was down for a third day, while the Cboe Volatility Index was on track for its biggest weekly surge since January. Metals prices slumped as part of a broader commodity selloff that extended to agriculture, oil and natural gas.

Investors are bracing for the withdrawal of unprecedented liquidity as the developed world looks to mass vaccinations to keep the recovery on track. However, the persistent spread of coronavirus and slowing China growth raise questions about whether the global economy can absorb the winding down of stimulus. COVID-19 patients are dying in U.S. hospitals at levels not seen since February -- and the numbers could worsen as intensive-care units overflow in parts of the South.

“This week’s options expiration is likely amplifying the volatility,” wrote Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter. “This market remains complacent and vulnerable to ‘air pockets.’”

Chinese stocks listed in the U.S. endured another day of selling after officials unleashed a fresh round of proposed regulations. Tencent Holdings Ltd. and Alibaba Group Holding Ltd. each tumbled more than 6 per cent. Robinhood Markets Inc. sank after warning cryptocurrency-driven trading that fueled quarterly revenue may quickly fade. Nvidia Corp., the largest U.S. chipmaker by market value, rallied after reporting a surge in earnings and giving predictions that exceeded even rosy Wall Street estimates.

Stocks

• The S&P 500 fell 0.2 per cent as of 2:36 p.m. New York time
• The Nasdaq 100 rose 0.2 per cent
• The Dow Jones Industrial Average fell 0.5 per cent
• The MSCI World index fell 0.9 per cent

Currencies

• The Bloomberg Dollar Spot Index rose 0.5 per cent
• The euro fell 0.3 per cent to US$1.1677
• The British pound fell 0.8 per cent to US$1.3644
• The Japanese yen was little changed at 109.79 per dollar

Bonds

• The yield on 10-year Treasuries declined two basis points to 1.24 per cent
• Germany’s 10-year yield was little changed at -0.49 per cent
• Britain’s 10-year yield declined three basis points to 0.54 per cent

Commodities

• West Texas Intermediate crude fell 2.6 per cent to US$63.78 a barrel
• Gold futures fell 0.2 per cent to US$1,780.70 an ounce

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2021-08-19 18:41:30Z
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