New Covid Variant Fears Sink Dow Futures By 800 Points

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The new Covid variant found in South Africa has spread fears across U.S. stock futures which plunged 817 points, equivalent to 2.3% on Friday –when markets will close at 1 p.m. ET due to the Thanksgiving holiday. Nasdaq 100 and S&P 500 futures were down 1% and 1.8% respectively.

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New Covid Variant

As reported by CNBC, the new COVID-19 variant found in South Africa is rocking the stock market, as Germany, the U.K. Italy and Singapore have set out to suspend flights from six African countries: Zimbabwe, Botswana, South Africa, Namibia, Lesotho, and Eswatini.

Markets in Asia had a tough Friday as in Japan and Hong Kong, the Nikkei 225 and the Hang Seng index dropped more than 2% each.

Bond prices rose and yields tumbled amid a flight to safety. The yield on the benchmark U.S. 10-year Treasury note fell 13 basis points to 1.511% (1 basis point equals 0.01%). This was a sharp reversal as yields jumped earlier in the week to above 1.68% at one point. Bond yields move inversely to prices,” the media outlet informs.

The new Covid variant also sent oil prices down as U.S. crude futures shrank by 6.2% to $73.57 per barrel, and the South African rand declined 1.7% against the greenback to 16.231 per dollar.

Stock Impact

The stock of several travel companies took the biggest hits, as Carnival Corp (NYSE:CCL) and Royal Caribbean Cruises Ltd (NYSE:RCL) were down by more than 10% each in premarket trading. Marriott International Inc (NASDAQ:MAR) and Hilton Hotels Corporation (NYSE:HLT) dropped more than 5%.

Airlines’ stock also suffered as Delta Air Lines Inc (NYSE:DAL), United Airlines Holdings Inc (NYSE:UAL), and American Airlines Group Inc (NASDAQ:AAL) all plunged more than 7%.

As shrinking economic activity fears rise, shares of Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), and Goldman Sachs Group Inc (NYSE:GS) sank by 4%.

The plunges come at a time when the U.S. has recorded its lowest new jobless claims since 1969, and inflation hovers at 4.1% –as per the Federal Reserve Core CPE indicator. on the consumer side, personal income and spending grew beyond expectations in October.