Black Friday is usually a day of Friday sales following the Thanksgiving holiday in the United States. This time, however, the sell-off also affected assets in the financial markets, starting with stocks and ending with cryptocurrencies.
Both the Eurostoxx 50 and the German DAX seemed to lose around 3 percent each on Friday in the wake of sharp declines in the Asia-Pacific region. The declines may come amid concerns about the spread of a newly identified and possibly vaccine-resistant coronavirus.
New coronavirus and declines in US stock markets
Markets appear to be under intense pressure as the new variant, which has already been detected in South Africa, Botswana and Hong Kong, has prompted the UK to announce a temporary ban on flights from six southern African countries, and investors are concerned that other countries may impose similar bans. Moreover, investor sentiment may be negatively impacted by the restrictions being implemented in Europe and the prospect of faster monetary tightening in the U.S., where futures appear to be losing value today. S&P 500 futures are down 1.8 percent, while Nasdaq 100 futures are down 1.2 percent, and the Dow Jones seems to be losing the most, at over 2.2 percent.
Also joining the declines in the equity markets were WTI crude oil futures, which appear to be losing more than 5 percent. A barrel of oil is priced at about 74 today, the lowest level in nearly four weeks. Here, the discount may be influenced by growing concerns about the surplus of crude on the global scale in the first quarter of 2022. These concerns stem from the coordinated release of oil reserves by major consumers.
How will OPEC respond to the release of strategic reserves?
OPEC's advisory board expects a surplus of 400,000 barrels per day (bdp) in December and predicts that if a reserve release occurs, the surplus will rise to 2.3 million bdp in January and 3.7 million bdp in February. The OPEC+ alliance will meet on December 1-2 to decide whether to continue increasing output levels by 400,000 bdp in January. Indeed, some cartel members have warned that the release of strategic reserves could lead to a halt in oil supplies. At the same time, the fourth wave of coronavirus cases in Europe and a new variant of COVID from South Africa, which may reduce the effectiveness of vaccines, may worsen the demand outlook.
Cryptocurrency sell-off
We can also see sharp discounts in the cryptocurrency market. The price of bitcoin fell below $55,000 today, which happened for the first time in a month and a half. The ETH/USD exchange rate fell to USD 4 thousand, while litecoin dropped below USD 200 and found itself at its lowest level in 20 days.
Daniel Kostecki, Director of the Polish branch of Conotoxia Ltd. (Forex service)
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