Jakarta, CNBC Indonesia – The stock market of the United States (US) opened lower on Wednesday (4/8/2021), following the poor performance of automotive manufacturers and labor data.
The Dow Jones Industrial Average fell 147 points (-0.4%) at 08:30 local time (20:30 WIB) and within 20 minutes to minus 161.4 points (-0.46%) to 34,955.01. The S&P 500 was down 13.4 points (-0.3%) to 4,409.78 while the Nasdaq was down 3.8 points (-0.03%) at 14,757.47.
The S&P 500 index hit a new record high yesterday with a year-long rally of more than 17%. General Motors shares plunged 6%, after the automaker failed to meet market expectations regarding its financial performance in the second quarter of 2021.
On the other hand, the ADP survey said there were an additional 330,000 new payslips as of July, or below market expectations of 653,000. This bad data comes along with the news that the delta variant of the Covid-19 virus is spreading.
“The culprit is the Delta variant. It hasn’t led to a change in public restrictions policy but it could make people hesitate to return to work, especially in a country where vaccination doubts are still high,” said James McCann, deputy chief economist at Aberdeen Standard Investments, in a research report cited by Reuters. CNBC International.
Yield (yield) The 10-year US Treasury bond early Wednesday fell back to 1.13%, erasing yesterday’s gains. This indicates buying is increasing, so prices are rising (and yields are depressed) amid concerns around the pandemic.
The drive to hunt down assets safe haven (low risk but low return) This came after Federal Reserve Governor Christopher Waller in CNBC International stated that the US central bank could start reducing purchases of securities on the market as early as October.
Wall Street was also depressed, and some investors diverted their funds to hunt back these assets, because the profits will be more attractive when the benchmark interest rate rises. Moreover, there is still a risk in the form of the spread of the delta variant of Covid-19.
The market is also monitoring the progress of infrastructure stimulus proposals, in which Finance Minister Janet Yellen will provide an official statement regarding it. Lyft and Caesars Entertainment released Q2-2021 financial results that exceeded market expectations.
In yesterday’s trading, the Dow Jones closed up 0.8% (278 points) to 35,116.4 and the S&P 500 added 0.8% to a new record high of 4,423.15. The Nasdaq was up 0.6% at 14,761.29.
CNBC INDONESIA RESEARCH TEAM
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