Wall Street, FTSE 100 sell-off, Oil down as markets react to Covid variant news

Markets are displaying nervousness at a time investors hoped the holiday season would see an uptick in buying pressure. This hinged on Wednesday’s news that the Fed could hasten its tapering program and see it implement an interest rate hike early in 2022.

The nomination of Jerome Powell for a second term as Fed Chair added to the perspective. However, it appears the Covid variant news, potential travel restrictions and national lockdowns are fueling risk aversion among investors.

Wall Street and FTSE 100 sell-off

Global markets have traded lower on Friday, undoing the minor gains seen earlier in the week, including the FTSE 100 where a rebound in travel and aviation stocks is once again in a slowdown.

The FTSE 100 was down 4%, the sell-off seen on Friday surpassing the one-day dump by percentage recorded in September. The index is dragging lower due to massive investor portfolio realignments as people seek to shield themselves from further losses in stocks of major industries such as travel and hospitality.

The same outlook is seen on Wall Street coming off Thursday’s holiday, with Dow futures seeing a massive downside and both the S&P 500 and Nasdaq registering significant drawdowns. The Dow Jones Industrial Average is down 897 points, or 3% to 34,817.05, while the S&P 500 and the Nasdaq Composite are 2% in the red.

Travel stocks dump

In the UK, the shares of IAG, easyJet and Rolls-Royce all plunged as the government suspended flights from six African countries.  IAG and Rolls-Royce are both down more than 15%. In Europe, Airbus SE has plunged 13%.

Wall Street has also seen major losses for travel-related stocks on Friday, with Boeing, Delta Air and American Airlines tanking more than 6% each. United Airlines is down more than 11%. 

In the hospitality sector the Hilton and Marriott International slipped more than 7%.

Shares that have shown to benefit from the anxiety include those of Moderna and Pfizer, which are up 23% and 8% respectively.

Oil slips despite US reserve release

Oil prices are facing further declines after this week’s pressure following fears of surplus supply. This week, the US announced plans to release millions of barrels of oil reserves said to be the biggest such release in decades.

Oil prices are down more than 11% on the day, and currently swings around $69.6 per barrel. It’s the worst drop for oil year-to-date, even as the market awaits OPEC and Economic Commission Board (ECB) moves over the next few days.

Bitcoin plummets below $60,000

The week has seen Bitcoin price continue its freefall since touching its peak of $69,044 on 10 November. The flagship cryptocurrency has dropped nearly 10% this week, with prices around support levels of $54,300 as of writing.

It’s possible BTC would sink further against a strong dollar, with investors running into bonds. Bitcoin price is 20% off its all-time high, but some analysts say it remains bullish and could still hit the $100k target by the end of the year.