Thursday, October 21, 2021

Global Market Square

By on March 23, 2021

The U.S. and global stock markets fell sharply Tuesday, with a strong sell-off that rose before the markets closed.

Two main items are impacting investor sentiment. We discuss both.

First, Europe is again leading the news of increases in Covid-19 cases, and discussion of lockdowns trigger turmoil in the markets. We note that during the last 30 days, Italy’s cases have risen 19.7%, France’s 18.14% and Germany’s 11.35%. Worldwide, cases rose 10.28%.

As people rely on the massive vaccine rollout, there have been some challenges in Europe, particularly with the AstraZeneca vaccine, which had been temporarily suspended over blood-clot fears.

The second item was the testimony to the U.S. Congress on the pace of economic recovery given by Federal Reserve Chairman Jerome Powell and Treasury Secretary Janet Yellen, who told the House Financial Services Committee that with the passing of President Joe Biden’s $1.9 trillion stimulus plan, “I think we may see a return to full employment next year.”

Meanwhile, Powell stated that “the recovery has progressed more quickly than generally expected and looks to be strengthening.”

We view the massive vaccine distribution as a potential challenge for the stock markets, with volatility continuing in the near term as the Covid-19 battle remains. At the same time, we expect that as herd immunity levels are reached, the economy can recover to its pre-pandemic numbers.

Wall Street summary for March 23, 2021:

  • The Dow Jones Industrial Average closed at 32,423.15, down 308.05 points, or 0.64%.
  • The Standard & Poor’s 500 closed at 3,910.52, down 30.03 points, or 0.76%.
  • The Nasdaq Composite Index closed at 13,227.70, down 149.85 points, or 1.12%.
  • The Birling Capital Puerto Rico Stock Index closed at 2,390.14, down 106.30 points, or 4.26%.
  • The U.S. Treasury 10-year note closed at 1.63%
  • The U.S. Treasury 2-year note closed at 0.15%.

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