Dow futures tumble 400 points on fears over new COVID variant detected in South Africa

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US stock futures were deep in the red early Friday, tracking heavy losses in Asian markets after scientists detected a new COVID variant in South Africa that could be to blame for the recent dramatic spike in cases.

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Investors are returning to a shorter day of trading after the Thanksgiving Day break.

How is stock-index futures trading done?
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Dow Inc DJIA on Wednesday,
Closed almost flat at 35,804.38, down 9.42 points. s&p 500 spx,
The Dow Jones slipped 0.2% to close at 4,701.46, down 0.1% from its November 18 record close of 4,704.54, according to Dow Jones market data. NASDAQ Composite Index Comp,
rose 0.4% to 15,84.23.

What is driving the market?

The discovery of the new COVID variant was announced by South African Health Minister Joe Fahla on Friday. He said scientists were worried because of its high numbers and that the country had seen a dramatic increase in infections in the last four or five days.

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Speaking at an online press conference, he said the variant, currently known as B.1.1.529, was also found in Botswana and Hong Kong among travelers who had traveled to South Africa, he said. The World Health Organization’s technical working group is holding an emergency meeting to assess the variant, which scientists are not sure is more lethal or more contagious.

OANDA Senior Market Analyst Jeffrey Haley said, “The one bull in China store that can really derail a global recovery has always been a new strain of COVID-19 that shocked the world and at large. Caused social withdrawal.” in a note. “By now all we know is that b.1.1.529 is heavily mutated but the markets are not taking any risks.”

After new cases stabilized at 200 per day, South Africa reported over 1,200 on Wednesday and 2,465 on Thursday. Scientists and health officials are concerned that such highly variable versions could evade vaccines. The UK government is banning flights from the country, along with five other African countries, effective Friday.

As stock futures declined and stocks in Asia declined, with the Nikkei 225 index Nikkei,
With a fall of over 2.5%, investors turned to safer assets like gold GC00,

JPY USDJPY, which jumped $14 to $1,798.30,
0.7% to 114.50, and government bonds. Yield TMUBMUSD10Y,
The 10-year US Treasury fell 9 basis points to 1.5517%.

US crude prices CL00,

CLF 22,
The new edition fell 3% to $75.90 a barrel on fears of falling demand.

“At the moment it is understood that the number of cases is low, but due to thin levels of liquidity in Asia trade as a result of the US holiday, the response appears to be greater, with bonds rising, sending yields down, and gold higher. ,” said Michael Hesson, chief market analyst at CMC Markets.

Investors are returning to a shorter session for US markets from the Thanksgiving Day break, often accompanied by thin volumes as traders often wait until Monday to return. There is no economic data on Friday’s calendar. But the week was filled with concerns about rising COVID cases and new restrictions in Europe.

Fears of a new version were weighing heavily on Black Friday shopping day, which focuses on retailers as consumers shop for bargains.

Facing the biggest inflation in 30 years, shoppers expect to spend a lot this holiday season


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