Virus spike in U.S. south plunges markets
The week ended ugly on Wall Street as all three major U.S. indices plummeted around 2.5%. Dow was the worst performer at -2.83%, closing at levels last seen on May 26 as all sub-sectors finished in the red. The catalyst remains rising COVID-19 cases in the American sunbelt, particularly Texas and Florida which are pausing their reopenings. Contrast the U.S. with Europe, where ECB Chief Christine Lagarde announced that Europe has likely passed the worst phase of the pandemic.
Unsurprisingly, airline and hotel stocks sold off Friday, but so did banks after the U.S. Fed announced bank stress test results late Thursday calling on American banks to halt share buybacks and cap dividends for Q3. Goldman Sachs sank 8.65%. Meanwhile, Nike‘s report late Thursday completely missed estimates, and the shoe stock fell 7.62%. Meanwhile, Facebook dropped 8.32% and Twitter lost 7.4% after Unilever announced it would stop advertising on these two platforms and calling for more controls of hate speech. Compared the U.S., the TSX performed well on Friday, yet still lost 1.66%. Banks here also took a hit with BMO slipping 4%. Gold propped up the Toronto exchange with several names gaining. KinrossGold spiked 3.29%.
Because the street so badly missed Nike’s numbers, investors are worried about other projections as more earnings roll in next week.