Stocks Close Lower as Thanksgiving Holiday Arrives, China Battles Renewed Covid Outbreak

UTC by Tolu Ajiboye · 3 min read
Stocks Close Lower as Thanksgiving Holiday Arrives, China Battles Renewed Covid Outbreak
Photo: NYSE / Twitter

US stocks are seeing a lower close to begin the thanksgiving holiday season, with all three major indexes slipping up.

The holiday week in the US saw stocks close lower after a volatile session to begin a short trading week. Meanwhile, the shares of multinational mass media conglomerate Disney jumped 6% just before the Thanksgiving break began.

The lower close of US stocks reflected in the three major indexes. For instance, the S&P 500 slipped 0.39% to 3,949.94, while the Dow Jones Industrial Average (DJIA) dropped 45.41 points, or 0.13%, to 33,700.28. However, the jump in Disney shares mitigated the losses on the index. Shares of the media and entertainment powerhouse climbed 6.3% following an announcement of former CEO Bob Iger’s return. He replaces Bob Chapek, who assumed the chief executive role in February 2020 and endured a rocky tenure.

Meanwhile, the tech-laden Nasdaq Composite declined 1.09% to conclude the day at 11,024.51.

The recent bearish development in the US will likely pause as a result of the shorter trading week for the Thanksgiving celebration. However, this period may also be characterized by increased volatility and lower volumes due to traders taking time off.

Earlier this month, stocks rose due to the positive readings of the October consumer price index (CPI). Additionally, the general climb in shares gained additional steam with the reading on wholesale prices from last week.

Stocks Close Lower as China Contends with Fresh Covid Outbreak

Meanwhile, across the Pacific in China are prevalent fears that Covid may be returning. Over the weekend, the East Asian giant recorded three related deaths, leading to the general expectation that China may increase restrictive measures again. This prospect is weighing heavy on the markets and lowering energy stocks and oil prices. China is the world’s largest importer of crude oil, and the anticipated constraints from any Covid restrictive measures will indeed have a direct impact on global oil production and sales, according to analysts.

Commenting on the development in China, chief market strategist at B. Riley Financial, Art Hogan, stated:

“[China’s predicament] puts a dent in the global economic recovery story that we were hoping would be ushered in with a reopen in China.”

In addition, a team of economists at banking giant Goldman Sachs recently issued a note explaining their decision to lower oil forecasts. The observation read:

“China’s Covid cases are at Apr-22 highs, yet, the new policy reaction function is unknown … we lower our expectations for China demand by 1.2 [million barrels per day] for the quarter (to 14.0 mb/d), anticipating further lockdowns from here.”

Inflation Optimism

In other news, traders continue to monitor cues from the Federal Reserve following renewed optimism from last week that inflation was abating. On Monday, Loretta Mester, Cleveland Fed President, reiterated that although inflation hikes may continue, they could be smaller ahead.

All ears will be attentive when St. Louis Fed President James Bullard speaks on the Fed’s projected course of action later in the day.

Business News, Indices, Market News, News, Stocks
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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