Here are the key news, trends, and analysis investors need to start their trading day:
1. Dow will lose nearly 700 points in global sell-off
Traders on the NYSE floor
Global equity markets slumped on Monday, with the Dow futures falling nearly 700 points, or nearly 2%, leading the way down in the United States. A number of emerging investment risks resulted in the widespread sales.
- Hong Kong’s Hang Seng Index fell more than 3% overnight amid concerns over possible market contagion from the bankrupt Chinese real estate developer Evergrande Group. European stocks also fell as Wall Street followed suit.
- Investors were already concerned about the seasonally rough September and the particularly weak historical trend of the second half of the month. The Dow Jones Industrial Average, S&P 500 and Nasdaq fell on Friday and throughout last week.
- The Federal Reserve’s two-day monetary policy meeting in September, which begins Tuesday, is also a wildcard for the markets. Central banks are considering starting to reduce bond purchases amid heightened inflation and a recovering economy. Fed chief Jerome Powell has claimed that rising price pressures will only be temporary.
2. Evergrande problems could spread beyond China
A peeling logo of the Evergrande Oasis, a residential complex developed by the Evergrande Group, is pictured outside the construction site, on which the residential buildings are unfinished, in Luoyang, China, 16 September 2021. Image taken on September 16, 2021.
Carlos Garcia Rawlins | Reuters
With Evergrande on the verge of collapse, analysts warn that the potential ramifications could have far-reaching ramifications beyond China. After years of rapidly expanding and buying up assets while the Chinese economy was booming, Evergrande is now snowed under stifling debt of $ 300 billion. Evergrande, the owner of more than 1,300 real estate projects in over 280 cities in China, said its escalating problems could lead to wider risk of default.
3. Yellen is calling for the debt ceiling to be raised again
Treasury Secretary Janet Yellen testifies during a Senate Fund Subcommittee hearing to consider the 2022 Treasury budget proposal on June 23, 2021 at the U.S. Capitol in Washington, DC.
Greg Nash | AFP | Getty Images
US Treasury Secretary Janet Yellen again called on Congress to raise the national debt ceiling. In a comment in the Wall Street Journal on Sunday, Yellen said failing to do so would result in an initial U.S. default and a historic financial crisis that would worsen the damage from the Covid pandemic. Yellen, chairman of the Fed before Powell, said last week that the Treasury Department would be exhausting its emergency efforts to make payments on debt that arose as early as October.
4. Bond yields, oil, cryptocurrencies under pressure
5. Pfizer Says Covid Vaccine Is Safe, Works For Children 5-11
A Pfizer-BioNTech Covid-19 vaccine vial will be given on Jan.
Robyn Beck | AFP | Getty Images
Pfizer and BioNTech announced Monday that their Covid vaccine is safe and elicits a “robust” immune response in a clinical trial involving children between the ages of 5 and 11, a part. Pfizer and BioNTech will submit their results “as soon as possible” to the FDA and other US regulators. The New York Times reported that vaccinations for the younger children could start as early as Halloween.
The FDA is expected to make a decision sometime this week on which groups are eligible for a third dose or booster of Pfizer’s Covid vaccine. An FDA advisory committee on Friday unanimously recommended Pfizer booster vaccinations for people over 65 and other Americans at risk. The panel voted against boosters for the general public at this point. Pfizer and BioNTech stocks were lower during Monday’s pre-trading downturn.
– Reuters contributed to this report. Follow the whole market like a pro on CNBC Pro. Get the latest on the pandemic with coronavirus coverage from CNBC.