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COVID Delta Variant Continues to Hamper Major American Indices

July 19, 2021

The Dow Jones, the S&P 500, and the Nasdaq weakened every week as traders have become insecure amid concerns that the economy could be hit by the fast-spreading Delta variant of the coronavirus. Delta remains the dominant variant and accounts for over 50% of positive COVID-19 samples in many countries, pointing to the fact that the battle against the coronavirus is still not over.

On Friday, public health officials reported that U.S. coronavirus cases were up 70% over the previous week, with deaths up 26%. According to the report from the American Association of Individual Investors, investor optimism fell to the lowest level since October 2020.

Earlier this week the World Health Organisation said:  The new variants will continue to emerge as long as the virus keeps spreading, and new ones could be more lethal or prove resistant to vaccines, undermining the entire effort,” 

We mustn’t forget that mixed U.S. economic data that was published last week also aided concerns about slowing economic growth. U.S. retail sales were up in June 0.6%, but consumer confidence contracted in July to 80.8 from 85.5 in June.

Jerome Powell Chairman of the  U.S. Federal Reserve said that inflationary pressures are likely to be temporary, but he also said that  members would continue to discuss tapering in the upcoming meetings.

For the week, S&P 500 SPX weakened by -1% and closed at 4,327 points. And as of writing is sitting at an even lower 4312.8.

If the price falls below 4,200 points, it would be a strong “sell” signal, and would open the open way to 4,100 or even 4,000 points. The upside potential remains limited for the week ahead, but if the price jumps above 4,400 points, the next target could be around 4,450 points.

The Dow Jones Industrial Average DJIA weakened -0.5% for the week and closed at 34,687 points.

Dow Jones weakened from its recent highs, and if the price falls below 34,000 points, it would be a strong “sell” signal. The current resistance level stands around 35,000 points, and if the price jumps above this level, the next target could be around 35,200 points.

The Nasdaq Composite (COMP) has lost -1.9% weekly and closed at 14,427 points. 

The strong support level stands around 14,000 points, and if the price falls below this level, it would be a strong “sell” signal, and we have the open way to 13,500 points.

 

 

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