Stocks around the globe traded lower following the long holiday weekend. Treasuries caught a bid higher amid the “risk-off” trade, with the yield on the 10-year Treasury note hovering around 1.33% mid-week. Chinese ride-hailing company Didi dropped more than 20% on Tuesday after Chinese officials ordered the ride-hailing giant’s platform be removed from mobile app stores. In energy, oil fell from multi-year highs this week after OPEC (Organization of Petroleum Exporting Countries) failed to come to an agreement regarding future output levels.
As of Wednesday, the front month WTI Crude Oil futures contract was trading around $74 a barrel. The ISM services index declined by more than expected in June, showing declines in the business activity, new orders, and employment components. On the virus, the rapid spread of the very transmissible Delta variant continues to weigh on sentiment. While the Delta variant reduces vaccine efficacy at preventing infections, full vaccination appears to remain highly effective against hospitalizations. Overall, the greatest risk will likely be concentrated amongst low-vaccination countries and could lead to slower global reopening. For the rest of the week, investors will be looking for clues on the direction of the Federal Reserve’s monetary policy when its most recent meeting minutes are released Wednesday afternoon.
Source: GSAM, CNBC, MFS, Factor Investor
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