Jul 20, 2021
The broad market sold off hard on Monday under the weight of a perfect storm of bad news. The backdrop, rising inflation, and inflation at a much hotter pace than expected. The catalyst, rising numbers of COVID-19 infections and a sharp plunge in oil prices. The OPEC+ cartel reached an agreement after two weeks of haggling to slowly begin raising output and that has put a cap on oil prices.
Texas intermediate fell 7% on the news and brought the entire oil complex down with it. On the covid front, rising numbers of the COVID-19 Delta variant have the market on edge and fearful of its economic impact. The S&P 500 fell more than 2% at the low of the day and broke through the short-term moving average in the process. If the index cannot regain its footing in Tuesday?s action a much deeper decline is more than likely.