US mixed equities; Oil prices and bond yields fall as COVID-19 outbreak in Europe leads Austria to shutdown

U.S. stocks were mixed on Friday as bonds and the dollar rose and crude oil slumped as the growing COVID-19 epidemic in Europe led Austria to announce a lockdown, with Germany considering a while US cases have also increased.

The Dow Jones Industrial Average fell 0.5% to 35,698.77, while the S&P 500 rose 0.2% and the Nasdaq Composite gained 0.7%.

Tech stocks performed better while the energy and financial sectors lagged.

West Texas Intermediate crude oil fell $ 3.60 to $ 75.41 per barrel, its lowest level since early October.

The dollar weakened 0.4% against the Japanese yen to 113.78, but appreciated against the euro and pound sterling. Austria will become the first country in Europe to impose COVID-19 vaccines by law and announced a full national lockdown from Monday amid a fourth wave of COVID-19 sweeping the continent, according to a Sky report.

German Health Minister Jens Spahn has hinted that the country could follow Austria in announcing a full lockdown, the report added. Germany is the largest economy in Europe and is among the top five world exporters.

The 10-year US Treasury yield fell 6 basis points to 1.53%.

Sovereign curves are recovering across maturities, with the US Treasury yield curve shifting lower, Derek Holt, head of capital markets economics at Scotiabank, said in a research note Friday. The dollar and other safe havens such as the yen and Swiss franc are recovering, but the euro is suffering as the epicenter of pandemic concerns is currently in Europe, he said.

“The first answer is to seek safe havens, but supply chain risks and links to inflation could trigger double thinking about this,” Holt said. “The United States is seeing a slight increase in the rates of new cases that focus primarily on the Midwest, but after Thanksgiving it will require close monitoring given some of the airlines’ travel forecasts.”

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Felix J. Dixon