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03 Aug 2021
2 min read

US Stocks Falter as Covid-19 Cases Surge to a January High

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Key Takeaways

  • A sharp rise in confirmed cases leads to renewed concerns over the economic outlook
  • Stocks on Monday edged lower, while Tuesday futures indicate a slightly higher open

US Stocks Falter

Stocks lost a bit of their glimmer on Monday as investors decreased their risk appetite, prompted by a resurgence of Covid-19 cases across the states. Confirmed daily cases in the US for Monday arrived at 135,811, almost six times the cases registered in the previous day. The latest number reached daily infection levels last seen Jan 29 when the country was coming down from its pandemic peak.

The seven-day average of daily coronavirus cases for the period ended August 2 climbed to 85,866. The rate surpassed the seven-day average for the same period a year ago when the US did not have an authorized vaccine. A year ago, the country was reporting about 69,000 headings into August, according to data from the Centers for Disease Control and Prevention (CDC).

CDC Director Rochelle Walensky appeared for a press conference in the White House to comment on the sharp rise in confirmed cases. In her comments, she encouraged people who have decided to get a third shot of a coronavirus vaccine, to report data to government health experts.

“While we desperately want to be done with this pandemic, Covid-19 is not done with us and so, our battle must last a little longer,” Ms. Walensky said during the briefing. “This is hard. This is heavy. But we are in this together. And as we learn more about Covid, we continue to rely on proven ways to protect ourselves, our children, and our loved ones,” she added.

Incentive Drive for Inoc

Data from the CDC shows health officials are administering about 673,000 doses per day on average. The figures are down about 80% from the peak of 3.38 million shots reported on April 13. Given the decrease in daily vaccinations, the US yesterday reached the milestone of 70% of adults with at least a single dose of a vaccine. On that note, President Joe Biden set a goal on May 4 to reach 70% of the adult population by July 4. However, it took almost a month extra to reach the target.

In a step to encourage vaccinations among the holdouts, President Biden is working with states for a $100 incentive to be given to anyone who gets inoculated.

As cases in the US rose sharply over the last week, and the Delta strain is overshadowing the flurry of corporate earnings reports, investors started doubting again whether the economic expansion could continue with the same rapid pace. To curb their risk exposure, market participants on Monday retreated broadly from the stock market. The Dow Jones Industrial Average and the S&P500 declined on the first trading day of August.

The 30-stock benchmark index lost about 100 points or roughly 0.3%. The S&P500 also turned lower, declining modestly by nearly 0.2%. The Nasdaq Composite pushed higher as technology companies were more resilient amid the broader slide. The tech-focused stock average advanced by a little over 8 points.

Futures on Tuesday point to a green open for all three main indexes as traders and investors appear optimistic to pare the Monday losses.

In Europe, stocks continued their upside swing from yesterday. Major European bourses are higher in the early trading hours of Tuesday’s session.

Bitcoin and cryptocurrencies today are trading lower as the recent rally cooled off. The leading cryptocurrency is lower by about 1.5% on the day, hovering near $38,300. Ether declined roughly 4.5% to trade around $2,500.

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