Economists are lowering forecasts, and investors are feeling nervous about the Delta variant


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Investors on the US stock market worth 51 billion dollars come to the conclusion that the spread of the Delta coronavirus variant will slow down the recovery of the global economy, threatening a record plow.

The reference S&P 500 index fell the most on Wednesday month before making a smaller profit on Thursday. Major stock indexes in Europe and Asia closed lower on Thursday.

Signs of a slowing recovery have been piling up in recent weeks as the coronavirus spreads again, and research indicates weaker business activity growth in several U.S. regions, as well as deteriorating trends in consumer confidence. Data on Tuesday further worried investors retail in the country it fell faster than expected. Weak economic data from China only further worried.

Along with signals that Federal Reserve policymakers are ready to prevent urgent stimulus measures in the coming months, money managers have expressed doubts about the ability of stocks to rise above already high levels.

Trading in the options markets underlined the cautious attitude of investors, as many traders on Thursday turned to derivatives that would protect against falling stock values. And the data of the Institute for Investment Companies showed that investors were added to the accounts of the state money market for the second week in a row, because they turned to cash.

“The market is at its peak of all time,” said Jim Tierney, portfolio manager at AllianceBernstein. “Look where we are come in a year . . . Look at the increased price-to-earnings ratios. You’ve put together a lot of things and people are just nervous and inclined: ‘Let me get some money off the table.’

A rush of coronavirus cases linked to a more contagious variant of the Delta prompted economists at Goldman Sachs on Wednesday to nearly halve their U.S. growth forecast for the third quarter. They now predict a 5.5 percent increase in gross domestic product between July and September, a sharp decline from their previous estimate of 9 percent. That pulled their year-over-year forecast by 0.4 percentage points lower to 6 percent for 2021.

“The impact of the Delta variant on growth and inflation has proven to be somewhat greater than we expected,” bank economists said. “Spending on dining, travel and other services is likely to decline in August, although we expect the decline to be modest and brief.”

The line chart of the S&P 500 index showing the Delta variant diminishes the US economic outlook

Federal Reserve officials also appear to be more at risk of the economy not opening up or the labor market recovering, smoothly as initially expected given Covid-19 concerns. Chairman Jay Powell made a case at the last monetary policy meeting in July that the economic impact of the Delta variant may not be as significant as previous outbreaks, but the minutes from that set say increased awarenessso that jumping cases could delay any turn from their stimulus.

“The risk from Covid is re-emerging as a really important negative risk,” said Jonathan Millar, a senior U.S. economist at Barclays. “He is back [Fed’s] radar and logs give them the freedom to curb the narrowing. ”

Yields on treasury bonds, the backbone of global financial markets, hit this month. But in recent days, they have slipped towards a six-month low, stressing persistent demand for asylum securities as the economic picture has become more hazy.

“No one is pointing to things and saying they’re cheap,” said John Leonard, global stock manager at Macquarie Asset Management. “The argument is that we all know that the fun has to stop at some point, but it’s not yet time to leave the party just because the alternatives are pretty unattractive.”

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