Stock futures fall on fears of new variant of Covid virus emerging in South Africa

A trader works on the floor of the New York Stock Exchange (NYSE) November 8, 2021.

Brendan McDermid | Reuters

US stock futures fell in overnight trading on Thursday as investors braced for a short trading day amid Renewed fears of Covid from a new type found in South Africa.

Dow Jones Industrial Average futures fell more than 400 points, while S&P 500 and Nasdaq 100 futures were in negative territory.

The downward move in futures came after World Health Organization officials warned on Thursday of a… New variant of Covid-19 detected in South Africa. The UK temporarily suspended flights From six African countries because of the alternative.

Markets are closed Thursday for Thanksgiving, so stocks pared Wednesday’s slight gains that halted the week’s losses for the S&P 500 and Nasdaq Composite.

Treasury yields rose this week, adding pressure on high-growth stocks. The Nasdaq is down 1.3% for the week, the S&P 500 is up less than 0.1%, and the Dow is up about 0.6%.

The last weeks of the year are usually a strong period for the market, as the so-called Santa Claus rally usually leads to a happy Wall Street holiday. The S&P 500 is up 25% year-to-date.

“I think we’re probably in a market that’s on track over the next few weeks until we get to the next [Fed’s Federal Open Market Committee] “I think spending will be strong at the consumer level…I think when we see the November jobs report coming out in mid-December, I think that will be favorable,” said Yong Yu Ma, chief investment strategist at BMO Wealth Management.

“I think the possibility of a re-calibration or a re-examination or a reassessment of the market will likely arise when the FOMC makes its announcements on [Dec. 15]. Until then, we’ll have a lot of what we already know.”

Friday also marks the unofficial start of the holiday shopping season, as investors will be looking for insight from Black Friday to set the mood for the American consumer.

Retail stocks have seen dramatic moves in both directions during this earnings season. Shares of Gap and Nordstrom fell more than 20 percent on Wednesday, but Cool jumped more than 10% A week ago after reporting strong growth in sales.

Retail executives during the quarter talked about how they’re managing supply chain issues and inflation. It also remains to be seen if the discussion about supply chain issues has prompted consumers to start holiday shopping early, which could affect fourth-quarter sales.

“I wouldn’t be surprised if it’s so dynamic this holiday season,” said Sarah Henry, portfolio manager at Logan Capital Management. She added that her company was looking for companies with long-term strategic advantages rather than betting on the best holiday sales results.

Wednesday also saw several strong economic reports, with October personal income and consumer spending coming in higher than expected and Initial jobless claims are at their lowest level since 1969. However, Core PCE, the Fed’s preferred inflation measure, remained high at 4.1%.

There are no major economic releases scheduled for Friday. The stock market will close at 1 PM ET on Friday due to the weekend.

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