5 things to know before the market opens on Monday

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Here are the most important news, trends and analysis investors need to start their trading day:

1. Dow set to lose 600 points in massive global market sales

Trading on the NYSE Floor

Source: NYSE

Global equity markets fell on Monday, with Dow futures contracts falling more than 600 points, or more than 1.6%, paving the way for the downside in the United States. A number of emerging investment risks led to the sell-off.

  • Hong Kong’s Hang Seng Index fell more than 3% overnight amid concerns over possible market contagion from Chinese real estate developer Evergrande Group, which is on the brink of bankruptcy. European stocks also fell as Wall Street followed suit.
  • Investors were already concerned about the seasonally difficult September and the historic trend for the second half of the month being particularly weak. The Dow Jones Industrial Average, S&P 500 and Nasdaq fell on Friday and throughout last week.
  • The Federal Reserve’s two-day political meeting in September, which begins on Tuesday, is also a wild card for the markets. Central bankers are wondering when to start phasing out their bond purchases amid high inflation and economic recovery. Fed Chairman Jerome Powell has maintained that the upward pressure on prices will be temporary.
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2. Evergrande’s problems could extend beyond China

A peeled off logo of the Evergrande Oasis, a real estate complex developed by Evergrande Group, is pictured outside the construction site where residential buildings are unfinished, in Luoyang, China on September 16, 2021. Photo taken on September 16, 2021.

Carlos Garcia Rawlins | Reuters

With Evergrande on the brink of collapse, analysts warn that the potential fallout could have far-reaching implications beyond China. After years of rapid expansion and recovering assets while China’s economy was booming, Evergrande is now under crushing $ 300 billion in debt. Evergrande, owner of more than 1,300 real estate projects in more than 280 cities in China, said escalating problems could lead to wider default risks.

3. Yellen calls again to raise the debt ceiling

US Treasury Secretary Janet Yellen made another call to Congress to raise the federal debt ceiling. In a Wall Street Journal editorial on Sunday, Yellen said failing to do so would result in a first-ever US default and a historic financial crisis that would worsen the damage from the Covid pandemic. Yellen, the Fed chairman before Powell, said last week that the Treasury would exhaust its emergency efforts to make payments on debt already incurred in October.

4. Bond yields, oil, cryptocurrencies under pressure

The intersection of all of these worrying factors has led investors to sell stocks and risky assets and buy bonds. The 10-year Treasury yield, which moves inversely to price, fell to around 1.33% on Monday. US oil prices fell 2% on Monday. Bitcoin, which has recently seen some strength after a summer sell-off below $ 30,000, fell nearly 7% on Monday. The world’s largest cryptocurrency traded around $ 44,275 at the start of the session. It hit an all-time high of over $ 64,000 in April.

5. Pfizer Says Covid Vaccine Safe, Works For Children 5-11 Years Old

Pfizer and BioNTech said on Monday that their Covid vaccine is safe and generates a “robust” immune response in a clinical trial in children aged 5 to 11. a part. Pfizer and BioNTech will submit their findings to the FDA and other US regulators “as soon as possible.” The New York Times reported that vaccinations for younger children could start as early as Halloween.

The FDA is expected to make a decision this week on which groups are eligible to receive a third dose, or a booster, of Pfizer’s Covid vaccine. On Friday, an FDA advisory committee unanimously recommended Pfizer booster shots for people 65 and older and other vulnerable Americans. The panel voted against boosters for the general public at this time. Pfizer and BioNTech shares were down in the fore-market downturn on Monday.

– Reuters contributed to this report. Follow all the market action like a pro on TUSEN Pro. Get the latest pandemic news with TUSEN’s coronavirus coverage.

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