Shares closed lower on Monday after weekend reports that China had launched a new round of restrictions to curb increasing cases of COVID-19.
The regulations included a week-long shutdown of non-essential businesses in the Chinese gambling center of Macau, which caused casino shares to tumble. Wynn Resorts (WYNN, -6.5%) and Las Vegas Sands (LVS, -6.3%) was among the notable decreases.
The news from China also weighed on oil prices, with US short-term contracts 0.7% lost to $ 104.90 per barrel.
“Oil prices weaken as the crude demand outlook is hit by a one-to-two blow from China’s rising COVID cases and Wall Street warring that inflation is hitting the US economy much harder than analysts had expected,” said Edward Moya, senior market strategist at currency data provider OANDA. “Oil will struggle to maintain the $ 100 level if China’s COVID situation worsens much further.”
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In terms of the sector that recorded the worst performance to kick off the trading week, that distinction went easily communication serviceswhich fell 3.0% amid a decline of 11.3%. Twitter (TWTR) stock. Shares in the social media platform have been hit by reports that Tesla (TSLA, -6.6%) CEO Elon Musk will end his $ 44 billion purchase of Twitter.
TWTR’s decline has blossomed in other sectors, with Alphabet (GOOGL, -3.1%), Amazon.com (AMZN, -3.3%) and Meta platforms (META, -4.7%) which all incur large losses.
The widespread sale has the Nasdaq Composite five-day winning streak as the tech-heavy index ended 2.3% at 11,372. The S&P 500 Index decreased by 1.2% to 3,854 and the Dow Jones Industrial Average retreated 0.5% to end at 31,173.
Other news in the stock market today:
- The little head Russell 2000 it decreased by 2.1% to 1,732.
- Gold futures Fell 0.6% to end at $ 1,7311.70 per ounce.
- Bitcoin Lost 6% to $ 20,497.90. (Bitcoin trades 24 hours a day; prices reported here are from 16:00)
- Lululemon Atletica (LULU) fell 4% after Jefferies analyst Randal Konik downgraded the yoga tailor to Hold’s Underperform (Sell). The analyst expressed concern about LULU’s “sky-high” sales per square foot, as well as increasing competition in an increasingly crowded space. “We believe there is limited upside, especially as recession risks increase, and there is uncertainty about the performance of shoes and MIRROR [LULU’s home gym]which limits visibility, “says Konik.
Another inflation update on deck
So what awaits this week? Many, it is assured. In addition to the start of the second quarter’s earnings season, inflation data will remain at the forefront. The Labor Department will release its Consumer Price Index (CPI) for June on Wednesday morning, with last month’s red-hot reading (CPI rose 8.6% year-on-year, the fastest annual pace since December 1981) that investors still have fresh in mind . .
No matter what happens, Tony DeSpirito, CIO of BlackRock’s US Fundamental Active Equities, believes it’s best to take a more defensive position. “That includes owning energy and finances,” says DeSpirito, while also adding “health care for a dose of resilience.”
Indeed, healthcare stocks are particularly useful as an inflation hedge because they can pass on higher prices to consumers. Read on as we explore a dozen healthcare companies ready to do well in almost any market condition.
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