<h1 class="pgc-h-arrow-right" data-track="1" > the three major stock indexes inverted V</h1> reversal
<h1 class="pgc-h-arrow-right" data-track="2" > the Dow fell nearly 470 points intraday</h1>
On Monday, Eastern Time, the three major stock indexes rose more than 0.5% at one point, and the Dow rose more than 200 points at one point, but in the afternoon, the three major stock indexes rushed higher and fell back.
Overall, there are four major factors dragging down the trend of US stocks: 1. Rising energy prices have exacerbated inflation concerns; 2. A long-term inflation indicator is approaching a new 7-year high; 3. Goldman Sachs has lowered its US GDP growth forecasts; 4. Investors are worried about the upcoming earnings season.
By the close, the Dow was down 0.72 percent, or 250.19, at 34,496.06. Intraday, the Dow briefly touched a low of 34486, down about 465 points compared to its intraday high of 34,951. In addition, the S&P 500 fell 0.69% to 4361.19 points; the NASDAQ index fell 0.64% to 14486.20 points.
Before the US stock market, the news was mixed. On Monday, local time, AstraZeneca announced that its experimental COVID-19 antibody cocktail drug (AZD7442) could reduce the risk of severe illness or death by 50%. This positive news boosted market expectations for economic recovery. But on Sunday, Goldman Sachs again lowered its U.S. GDP growth forecasts, hitting investor confidence in the state of the U.S. economy.
Goldman Sachs chief economist Hadzius led a team of researchers released the latest report on Sunday, cutting the US GDP growth forecast for 2021 from 5.7% to 5.6% and the 2022 GDP growth forecast from 4.4% to 4%, mainly due to the slowdown in the recovery of consumer spending. At the same time, the economic growth forecast for the next two years was raised, and the range basically offset the decline in this year and next year. They also argue that the two major challenges to medium-term economic growth are slower fiscal support and a faster rebound in services spending than slower in commodity purchases.
Intraday, rising energy prices exacerbated concerns about inflation and economic conditions.
According to Wind, Neil Beveridge of Bernstein. "In the past, high or rapidly rising energy costs have triggered recessions. If energy prices continue to rise, history could repeat itself."
IHS Markit Vice Chairman Yergin pointed out on the same day that the Biden administration has few tools at its disposal to deal with energy prices. He also expects Biden to launch more investigations into energy prices.
In addition, there is a long-term indicator of inflation that is approaching a new 7-year high. According to foreign media reports, the 5y5y forward breakeven inflation rate (that is, the five-year average expected inflation rate calculated after five years, which is a common monitoring indicator used by the central bank) is close to the highest level in about seven years, which is the second time the index has issued a similar warning in recent months. Deutsche Bank pointed out that inflation expectations are now clearly out of the low inflation mechanism, and the 5y5y forward breakeven inflation rate has once again knocked on the 250 basis point mark. Deutsche Bank also warned that continued supply chain disruptions have the potential to keep inflation high, raise inflation expectations and force the Fed to raise interest rates early in 2022.
The upcoming new round of earnings season has also worried investors. Morgan Stanley warned that if the U.S. equity earnings season is hit by corporate downward guidance, it means that a deterioration in consumer confidence could soon affect equity investors. Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said, "We believe corporate profit forecasts are fragile, especially as consumer confidence translates into less spending and more savings. She also noted that consumer confidence is typically in tune with stock market movements, as consumption accounts for two-thirds of U.S. GDP.
<h1 class="pgc-h-arrow-right" data-track="25" > for the first time in nearly 7 years, the U.S. oil closed above $80</h1>
<h1 class="pgc-h-arrow-right" data-track="26" > the White House was also alarmed! </h1>
On Monday, EST, WTI crude oil prices continued to rise, closing above $80 a barrel, closing above $80 for the first time since the end of 2014. Since the end of October last year, WTI crude oil has risen by 125%.
The White House was also alarmed by crude oil prices, and on Monday, White House officials said they were closely monitoring oil and gas prices. A variety of tools are being used to address anti-competitive behavior in the U.S. and global energy markets. Supports the call for OPEC+ to do more to support the global economic recovery and has communicated this to several senior members of OPEC+.
There are also large institutions that predict that oil prices may rise to $90 this winter. Citi noted that the trend of energy consumption from natural gas to oil has driven crude oil inventories down, so oil prices may hit $90 a barrel this winter.
<h1 class="pgc-h-arrow-right" data-track="35" > four NASDAQ constituents soared</h1>
<h1 class="pgc-h-arrow-right" data-track="36" > are pharmaceutical companies, up to 94%.</h1>
While the NASDAQ fell, the market had four nasdaq constituents soaring, up between 93.86% and 58%.
Among them, Protagonist Therapeutics surged nearly 94%, and the company announced on Monday that the U.S. Food and Drug Administration (FDA) has lifted the comprehensive clinical restrictions on the aflatoxin clinical study announced by the company on September 17, 2021. According to FDA regulations, doses of aloe vera peptides in all clinical studies may be restored.
Adamas PharmPharmticals rose more than 75 percent, and supernus pharmaceuticals has agreed to buy the company for $400 million in cash and two non-tradable options or rights of value (CVR). The transaction is expected to close by the end of the fourth quarter of 2021 or the beginning of the first quarter of 2022.
Flexion Therapeutics surged 58.65 percent, and on the news, Pacira BioSciences Inc announced that it would acquire the company. Progennity, which is also a pharmaceutical company, did not have any obvious good news on Monday.
China Fund News