Coronavirus-sensitive stock slides suggest more and more concern for Delta variant

By Lewis Krauskopf

NEW YORK (Reuters) – Shares of shares and bond yields are declining for a number of reasons, but the weaknesses in travel, leisure and other COVID-19 sensitivities suggest that fears of the Delta variant are on their side.

The declines in the shares of companies linked to reopening trade have outpaced those of other high-value stocks as they face concerns that economic growth will be slower than expected in the coming months.

Cruise shares (NYSE 🙂 Cruise Lines and Norwegian Cruise Line (NYSE 🙂 Holdings fell about 9% and 8%, respectively, in July, while American Airline Group was down nearly 4% and United Airlines Holdings (NASDAQ :)% It was 4.5. MGM Resorts (NYSE 🙂 International is down about 5% Expedia (NASDAQ 🙂 The group fell 1%.

The Russell 1000 stock index, which includes economically sensitive stocks, fell 0.8% over the same period, rising 0.7% in July trading on Thursday.

“There is a lot of uncertainty and I think the market is trying to add to the risk that global supply chains and down the road bring,” said Steve Englander, head of Standard Chartered (OTC) North America’s macro strategy. .

The yield on the 10-year Treasury note, on the other hand, fell about 20 basis points to 1.29% this month and fell eight consecutive sessions, marking the longest line since the nine-session decline, which ended on March 3, 2020. The COVID-19 pandemic was picking up speed in the United States.

The availability of vaccines – including their ability to maintain even those with serious complications – suggests the extent to which last year’s measures to control the virus will not be needed. However, some regions, including those that do not have so much access to vaccines, are increasing the number of cases or imposing restrictions. Cases in countries like Spain and England are on the rise, although the British government plans to reopen the economy later this month.

In Australia, Sydney has put in place a stringent request to stay home late last month as Japan declared a state of emergency in Tokyo on Thursday, and imposed restrictions until 22 August. in part, the expansion variant stems from concerns that it could reduce travel and slow growth, said Walter Todd, chief investment officer at Greenwood Capital in South Carolina. However, those shares should be down after such a tough race, he said. “A lot of those stocks moved significantly from the news of the vaccine,” Todd said. “Part of that is worrying about the reappearance of that variant, but also … you’re giving it something.”