Fresh Lockdowns and Chip Embargoes: China Drags Stocks Lower
(Thursday Market Open) It’s the first day of September and already the month appears to be living up to its bad reputation as equity index futures point to a lower open. Potential Market Movers As I mentioned in my September Outlook , the month of September has historically been the worst month on average for the SP 500® index (SPX) and the Dow Jones Industrial Average ($DJI). While there’s no guarantee this will be the case by the end of September, so far, the month is not off to a good start. One reason is that China announced that it is locking down more than 21 million residents in the city of Chengdu, which reported 700 new cases of COVID-19. As the northern hemisphere moves into winter months, global cases are likely to rise. This means that lockdown could be an ongoing problem for China’s economy and the global supply chain as China sticks to its zero-COVID policy. Chinese stocks were lower on the news with Shanghai composite down 0.54% and the Heng Seng tumbling 1.79%. China’s COVID-19 risk is likely contributing to falling oil prices because lockdowns lead to lower demand.
Fresh Lockdowns and Chip Embargoes: China Drags Stocks Lower
(Thursday Market Open) It’s the first day of September and already the month appears to be living up to its bad reputation as equity index futures point to a lower open. Potential Market Movers As I mentioned in my September Outlook , the month of September has historically been the worst month on average for the SP 500® index (SPX) and the Dow Jones Industrial Average ($DJI). While there’s no guarantee this will be the case by the end of September, so far, the month is not off to a good start. One reason is that China announced that it is locking down more than 21 million residents in the city of Chengdu, which reported 700 new cases of COVID-19. As the northern hemisphere moves into winter months, global cases are likely to rise. This means that lockdown could be an ongoing problem for China’s economy and the global supply chain as China sticks to its zero-COVID policy. Chinese stocks were lower on the news with Shanghai composite down 0.54% and the Heng Seng tumbling 1.79%. China’s COVID-19 risk is likely contributing to falling oil prices because lockdowns lead to lower demand.