Asia-Pacific Shares

Today’s Market Wrap Up and a Glimpse Into Tuesday

Today was not a pretty day in the markets after investors fled equities on rising fears of the COVID-19 Delta variant and the damage it could do to the economy. The Dow Jones Industrial Average shed 721 points, or more than 2%, for losses it hasn’t experienced since last October despite being off its lows of the session. Boeing was one of the hardest-hit stocks on worries of another lockdown, falling almost 5%.

The S&P 500 tumbled close to 2% while the Nasdaq was down just over 1%. Stocks weren’t the only asset class that suffered. Brent crude was down close to 7% to below the USD 70 threshold. Oil was set up for declines after OPEC and its allies reached an agreement over the weekend to bolster supply in an attempt to ease prices.

There was almost nowhere for investors to hide, except for bonds. Gold and bitcoin were even down on the day. Meanwhile, the yield on the 10-year Treasury fell to multi-year lows at 1.17%.

Stocks to Watch

IBM is in focus after the closing bell. After getting caught up in the selling pressure during the regular session, the stock rebounded in extended-hours trading. IBM is up nearly 4% thanks to a better-than-expected quarterly report in which the company’s top and bottom lines surpassed Wall Street estimates. The company proved that the turnaround from the pandemic was not a fluke as services and software both outperformed.

Investors are also celebrating AMC Entertainment in the after-hours for some fundamental reasons. The company announced the reopening of two theatres in the Los Angeles district. AMC was able to successfully negotiate with real estate firm Caruso to open the doors on the theatres after they were temporarily shut due to the pandemic. AMC shares are up fractionally in the extended-hours session.

Apple shares dropped close to 4%. The stock was recently perched at a fresh all-time high of USD 150 and is now trading closer to USD 140. Incidentally, Montreal-based investment firm Hexavest slashed its positions in tech stocks Apple and Microsoft in favor of healthcare stocks Merck and Pfizer in early 2021.

Look Ahead

On the economic front, Housing Starts for the month of June will be released on Tuesday. Wells Fargo economists are expecting a slight increase vs. May levels amid uninterrupted demand and improved conditions for lumber.

Netflix reports its Q2 results on Tuesday. The stock managed to eke out gains on Monday amid bullish expectations on Wall Street. Halliburton reports its Q2 earnings results on Tuesday.