Hello everyone. VIX formed a huge gap-up pattern today, and global markets tumbled with a new dangerous covid variant found in Europe. That triggered international concern because the vaccination may be less effective against the new strain.
Investors got scared. Nasdaq was down by over 2% with crude oil and US 10Y yield tumbled by over 7%.
Scientists are working around the clock to learn more about the its features that could be more dangerous than Delta. The sell-off is a market reaction because the new strain may put a bigger threat to public health.
I'm wondering the potential impact of the variant once it's been confirmed to have more transmissibility than delta.
1. US may slow down taper, even halt it. The rate hike may be postponed to 2023 or even later. That will benefit the stocks after market calmed down a bit. Look at the US 10Y yield, the drastic drop today indicate the bearish view of the future economic growth. However, it'll fully recover once the variant is not so dangerous as we expected it at the first place.
2. the possible lockdowns could give impetus to 'Work from home' related stocks. I noted Chewy has been up by over 2% today. Zoom has been up by more than 8%.
3. Crude oil falls on the possible weak demand caused by the lockdown and slow-down economy.
Investors got scared. Nasdaq was down by over 2% with crude oil and US 10Y yield tumbled by over 7%.
Scientists are working around the clock to learn more about the its features that could be more dangerous than Delta. The sell-off is a market reaction because the new strain may put a bigger threat to public health.
I'm wondering the potential impact of the variant once it's been confirmed to have more transmissibility than delta.
1. US may slow down taper, even halt it. The rate hike may be postponed to 2023 or even later. That will benefit the stocks after market calmed down a bit. Look at the US 10Y yield, the drastic drop today indicate the bearish view of the future economic growth. However, it'll fully recover once the variant is not so dangerous as we expected it at the first place.
2. the possible lockdowns could give impetus to 'Work from home' related stocks. I noted Chewy has been up by over 2% today. Zoom has been up by more than 8%.
3. Crude oil falls on the possible weak demand caused by the lockdown and slow-down economy.
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