Wall Street’s three main indexes ended sharply lower on Friday as news of a new COVID variant worried investors around the world.
The World Health Organization (WHO) on Friday designated a new COVID-19 variant detected in South Africa, and a lot of people didn’t want to hold risk assets on Monday morning or are afraid of what that could look like Monday morning.
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Markets are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain and would it initiate new lockdowns around the world. David Kotok, chairman and chief investment officer at Cumberland Advisors, added:
All policy issues, meaning monetary policy, business trajectories, GDP growth estimates, leisure, and hospitality recovery, the list goes on, are on hold. The new strain may complicate the outlook for how aggressively the Federal Reserve normalizes monetary policy to fight inflation.
The new Omicron coronavirus is detected in Britain, Italy, Netherlands, Germany, Israel, Belgium, Botswana, Denmark, Hong Kong, and Australia for now.
Britain has already imposed travel restrictions on southern Africa, while the European Commission is considering suspending travel from countries where the new variant has been identified.
The upcoming week will be busy, and investors will pay attention to Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen’s appearance before Congress to discuss the government’s COVID response on November 30.
S&P 500 down -2.3% on Friday
S&P 500 (SPX ) weakened by -2.3% on Friday and closed the week at 4,594 points.
If the price falls below 4,500 points, it would be a strong “sell” signal, and we have the open way to 4,300 or even 4,200 points.
The upside potential remains limited for the week ahead, but if the price jumps above 4,650 points, the next target could be around 4,700 points.
DJIA down -2.5% on Friday
The Dow Jones Industrial Average (DJIA) weakened -2.5% on Friday and closed the week below 35,000 points.
The Dow Jones Industrial Average remains under pressure as news of a new COVID variant worried investors worldwide.
The current support level stands at 34,500 points, and if the price falls below this level, the next target could be around 34,000 points.
Nasdaq Composite down -2.2% on Friday
Nasdaq Composite (COMP) has lost -2.2% on Friday and closed the week at 15,491 points.
The strong support level stands at 15,000 points, and if the price falls below this level, it could be a sign of a much larger drop.
Wall Street’s three main indexes ended sharply lower on Friday after the news that the World Health Organization designated a new COVID-19 variant detected in South Africa. All policy issues go on hold currently, and investors will pay attention to the government’s COVID response on November 30.
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