It is a new week in the financial markets but the main headline is old news: Covid-19. The coronavirus pandemic is making a return, thanks to the Delta variant, so far the most highly transmissible form of the virus.
The total number of coronavirus cases worldwide has surpassed 187.7 million. The global daily infection rate is approaching 500,000 right now, a number last seen towards the end of May, when the pandemic began loosening its deadly grip on India, the country to experience the Delta variant first.
India and Brazil, who both experienced their heaviest outbreaks of Covid-19 this spring, are still seeing thousands of new cases each day, though at a much lower level than during the peak of the outbreaks. The United Kingdom is seeing more worrisome trends at the moment, and cases have also started rising in the United States and parts of South America. Indonesia is also currently undergoing a serious Covid-19 outbreak.
Overall, this turn in the pandemic, which investors had been hoping was coming to an end, is now adding new pessimism to market sentiment. Accommodative actions by central banks around the world, together with possible new lockdowns in the affected countries are going to further influence the state of the global economy.
US stock indices today will broadly open lower due to the negative turn in the pandemic, especially considering that there are many states within the US with lower than average vaccination rates, where lockdowns might be necessary again.
One company to watch out for is Disney, whose latest Marvel movie just debuted in what is arguably the most profitable box office weekend since the pandemic started. Virgin Galactic is also a company to keep an eye on right now after founder Richard Branson officially kicked off space tourism this weekend.
In other news, the rift between China and the United States continues to grow. The Chinese government right now is trying to increase its degree of control over Chinese companies that have foreign listings, especially in the United States. By adding new legislation, China is essentially ensuring that it gets to decide which companies can be listed abroad, and which ones cannot. This can significantly impact the ability of foreign investors to participate in the growth of Chinese businesses.
