Jakarta, CNBC Indonesia – The United States (US) stock market opened lower on Monday (7/19/2021), following concerns about the increasing spread of the delta variant of Covid-19 in various countries.
Covid-19 cases in the US turned stronger this month, with the transmission of the delta variant of the Covid-19 virus. The number of new positive cases has now reached 30,000 per day in the past week, or up from the average a week earlier which was still in the range of 11,000 last month.
The Dow Jones Industrial Average fell 496.5 points (-1.4%) at 08:30 local time (20:30 WIB) and within 12 minutes to minus 521.1 points (-1.5%) to 34,166.75 . The Nasdaq dropped 191.8 points (-1.33%) to 14,235.47 and the S&P 500 fell 58.7 points (-1.36%) to 4,268.45.
Cyclic stocks – which would benefit from the reopening of the economy – fell at the open, such as shares of ferry issuer Royal Caribbean and airline United Airlines which fell more than 4%. Aircraft maker Boeing and automaker General Motors fell more than 2%.
Oil prices fell amid fears that demand would fall, while supply increased as the OPEC+ forum agreed on a gradual normalization of production. ConocoPhillips and Exxon Mobil shares fell 3% after the price of West Texas Intermediate (WTI) oil dropped 3% to US$ 69.36/barrel.
Yield (yield) US government bonds (US Treasury) 10-year tenor-which is the benchmark in the market-fall to its lowest level in 5 months, namely at 1.219%. Fears of an economic slowdown encourage investors to hunt for low-risk assets (safe haven) this.
“Consumer concerns about inflation as well as an increase in new cases of Covid-19 among vaccinated Americans could worsen consumer sentiment in the months ahead even after employment rates and issuer performance grow,” said John Stoltzfus, chief investment planner at Oppenheimer. quoted CNBC International.
Inflation in June shot to 5.4% year-on-year. The University of Michigan’s consumer sentiment index showed that consumers believe goods prices will rise 4.8% next year, the highest since August 2008.
A total of 76 issuers of the S&P 500 index released their performance for the second quarter of 2021 today, including United Airlines, American Airlines, Snap, Twitter. Honeywell, IBM, and Netflix.
Last week, the Dow Jones and S&P 500 fell 0.52% and 0.97%m and the Nasdaq fell 1.9% (worst week since May). Throughout July, the Dow and S&P 500 gained 0.7% and 0.5%, respectively, while the Nasdaq fell 0.5%.
The market today is monitoring the release of the housing index by the National Association of Home Builders. Economists in a Dow Jones poll had expected a figure of 81, the same as last month. A reading above 50 indicates a positive sentiment for potential home buyers.
CNBC INDONESIA RESEARCH TEAM
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