The mutant strain is a major risk for the fragile rebound of the European economy. In addition, it remains to be seen whether vaccines will be effective against the new strain.
Not surprisingly, global markets are deep in the red. S&P 500 futures are down by more than 1.5% in premarket trading. Travel-related stocks are hit especially hard, for example, Carnival Corp. is down by 7% while Delta Air Lines is down by 5% ahead of the opening bell.Advertisement
Oil Suffers A Major Sell-Off
At the end of the previous week, WTI oil looked ready to test the psychologically important $50 level, but the new coronavirus strain changed oil traders’ plans.
WTI oil gained strong downside momentum and made an attempt to settle below $46.50 before rebounding closer to the $47 level.
The new travel restrictions will inevitably put pressure on demand for oil just before OPEC+ will increase its production by 500,000 barrels per day. Obviously, the current trading session will be challenging for oil-related equities.
U.S. Congress Will Vote On The New Stimulus Package Today
U.S. Republicans and Democrats have managed to reach consensus on the new $900 billion coronavirus aid package over the weekend, and the Congress will vote on the new bill today.
The new stimulus package should have served as a major bullish catalyst for stocks, but traders’ attention got shifted to the new coronavirus strain so the news from Congress may have little impact on what will happen today in the markets.
However, the new stimulus package will provide support to the real economy, and its positive impact may present itself in the upcoming weeks.