New York stock indexes follow their global peers on Monday and start the day with consistent losses. The volatility index of the S&P 500, the VIX, skyrockets 20% and operates again at around 30 points.
The aversion to risky assets today is attributed to the growth of covid-19 cases in different regions of the world, to reports that large global financial institutions have maintained business with clients suspected of money laundering and other illegal activities and to the death of the judge US Supreme Court Ruth Bader Ginsburg, who is expected to spark a strong political dispute over the nomination of his successor, further complicating the scenario for the approval of a new fiscal stimulus package in the USA.
Around 12 pm, on the New York Stock Exchange (Nyse), the Dow Jones was down 2.90% at 26,856.18 points, while the S&P 500 was down 2.33% at 3,242.23 points. The Nasdaq electronic index was down 2.03% at 10,574.51 points.
– Foto: Richard Drew / AP
Shares in financial sector companies operate sharply on Monday after the American news site BuzzFeed News and the International Investigative Journalists Consortium released thousands of documents indicating that about $ 2 trillion in illicit resources were moved and laundered through the US financial system over the past two decades.
JP Morgan shares were down 4.22%, Bank of America fell 3.77% and Bank of New York Mellon fell 4.36%.
In the news related to the covid-19 pandemic, the seven-day moving average of new confirmed cases in the United States has risen for eight consecutive days and has remained at the same level since the end of August.
“At the current rate, hospitalizations are likely to start increasing again in mid-October, after falling continuously over the past two months,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Cases in Europe, on the other hand, continue to grow steadily. The fastest increases are in the Netherlands and Belgium, but there are also increases in France and Spain. Germany’s daily cases are rising slowly, while the trend in Italy is almost stable.
As an additional factor of concern for financial agents, the death of US Supreme Court Judge Ruth Bader Ginsburg should further complicate the electoral race and make the prospects for an agreement on a new round of fiscal stimulus to sustain the economy more uncertain. from the USA.
President Donald Trump said on Saturday that he would announce a new Supreme Court candidate soon, while Democrats say the winner of the November 3 election must choose the candidate.
“Both sides of the political spectrum were energized by the president’s actions, which only complicate the already volatile electoral scenario in the United States. In fact, with economic data suggesting a slowdown in the recovery, the history of markets could turn into geopolitical risk that, by its very nature, suggests a much more volatile price action next week, ”said Boris Schlossberg, managing director exchange strategy of BK Asset Management, on a daily note.