Black Friday

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Willem Vergeer
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Joined: 07 Nov 2021 08:38

Black Friday

Post by Willem Vergeer »

The stock exchanges in Europe, started sharply lower this morning. Futures on the Euro Stoxx 50 index pointed to a loss of more than 2 percent about an hour before the stock market bell. The cause is said to be the emergence of the latest corona variant in South Africa. Not only the European stock markets open sharply lower.

The rapid spread of a new corona variant in South Africa is making investors in Asia shudder this morning. In Japan, the Nikkei index loses about 3 percent, while the stock exchanges in Hong Kong and Sydney lose roughly 2 percent. Oil prices are down about 3 percent this morning. Interest rates are also under pressure.

Wall Street closed Thursday for Thanksgiving. Today, the US stock market reopens, but only for half a session.

New variant
In recent days, there has been an exponential increase in the number of corona infections in South Africa, as a result of a new variant. The virus has now also surfaced in Hong Kong. Israel and the United Kingdom, meanwhile, have blacklisted South Africa and canceled flights.

The new coronavirus mutation is said to be unusually different from previous variants and the World Health Organization WHO is meeting today to discuss the new variant and determine how it should be scaled.

“The news is troubling, causing a shock reaction to the stock markets in Asia,” said IG analyst Kyle Rodda. With many Wall Street traders taking a long weekend over Thanksgiving and Black Friday, liquidity is low, which can magnify price returns, Rodda warned.

However we have to put the unrest into perspective by stating that "investors have previously been confronted with the delta variant of the corona virus and that a handbook is ready for such situations". Mutations are something we expect and not something unknown.

At the moment (13:00 GMT) the markets seem to have calmed down a bit.

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