Hong Kong: Despite the healthy profitability of another group of companies, it is still difficult for investors to continue the global rebound for the third day. Asian markets oscillated on Friday, and the Delta variable continued to cast a shadow on the trading floor.
The three major Wall Street stock indexes closed close to a new high on Thursday, thanks to better-than-expected corporate reports, large-scale government stimulus measures and the central bank’s generous donation to the long-term economic recovery that seems unbreakable optimism.
This positive sentiment has withstood the most severe test to date, namely the surge in new coronavirus cases around the world-even those with high vaccination rates-which has forced several governments to re-impose lockdown or containment measures. .
The European Central Bank has promised that despite the strong rebound in the euro zone, at least until the end of March 2022, or until officials believe that the “coronavirus crisis phase is over”.
However, the Asian market was even more sluggish, with Hong Kong falling by more than 1%, while Shanghai, Singapore, Bangkok and Jakarta also suffered losses. Sydney, Seoul, Wellington and Mumbai rose slightly, while Taipei was almost unchanged. Tokyo is closed for holidays.
London, Paris and Frankfurt started well.
Nonetheless, analysts still believe that despite the surge in Delta, with more vaccinations, the recent decline will give way to more gains in the stock market.
Tracie McMillion of Wells Fargo Investment Research Institute said: “One of the most underestimated things in the stock market right now is how much these (companies) earnings have grown, and how much earnings expectations analysts have had to raise,” told Bloomberg Television.
She said that she is closely monitoring the Delta spread to prevent it from affecting consumer behavior and the recovery from “very good” to “very good.”
Market strategist Louis Navellier said that after data showed that unemployment benefits unexpectedly increased, the uneven recovery of the job market could alleviate any concerns that the Federal Reserve will consider tightening monetary policy.
He said the bank’s policy meeting next week would be pored over for any clues about its plans.
“Since the ECB was dovish with its statement… and boosted its quantitative easing, I expect that the Fed will also have a dovish (policy) statement,” he said in a note.
“This means that ‘Goldilocks’ is expected to continue, which is an accommodative Fed and strong economic growth.”
However, he added that US 10-year Treasury yields were dropping as investors shifted into safer havens owing to worries about Delta.
“This means that either inflation fears are ebbing or there is a flight to quality as the Covid-19 Delta fears spread. Frankly, I believe that although energy prices are moderating, the Covid-19 Delta fear of the global economy slowing is the biggest culprit behind falling Treasury bond yields.”