Asia stocks lower
Shares were mostly lower in Asia on Friday after U.S. stocks struggled amid uncertainty over rising Covid-19 cases and new risks appearing.
Nikkei index closed down at: 28000 a drop of around 276 points
On Thursday, U.S. stock indexes closed mostly down from recent highs. Asia stocks followed suit amid a rise in pandemic cases slowing global economic growth. Some 111 countries now have the delta variant as the prominent strain.
The S&P 500 closed down at: 4360 The index may now show its first weekly loss in four weeks.
The tech heavy Nasdaq closed down at: 14543.
The Dow Jones Industrial Average escaped the downward trend and bounced back after being down much of the day. The Dow closed up at: 34987
Bank of Japan – outlook ‘highly unclear’
The Bank of Japan made no changes to its policy Friday but downgraded its growth forecast for the current fiscal year slightly, to 3.5% – 4% from 3.5% – 4.4%. It said the outlook was ‘highly unclear’ and depends on how the COVID-19 situation unfolds.
Cases climb in Tokyo – delta variant of concern
Tokyo reported a six month high of new cases on Thursday – just over a week before the delayed Olympic Games are due to begin.
It is reported that most of Japan’s population are not fully vaccinated. Some worry the Olympics will raise the risks of further outbreaks at a time when the delta variant of COVID-19 is causing more worldwide cases.
Other related news
As the UK chases down re-opening D-day on the 19th July, it is heavily reported that cases of the delta variant are dramatically on the rise. The Prime minister has moved his final phase of fully opening the UK at a time when cases are higher than they were during the previous 6 months of lockdown. Seems and odd move! But vaccine roll out is seen as the reasoning behind this decision.
Word of caution
Prof Chris Whitty made it quite clear yesterday that this is far from over and that we were not ‘out of the woods’ yet. He also said potential hospitalisations could hit ‘scary numbers’ in the future. He went on to say that the UK was in much ‘better shape due to the vaccine programme, and drugs, and a variety of other things.’
Virus vaccine mutation dodging a possibility
Prof Whitty predicted that in the medium term, coronavirus could mutate into a ‘vaccine escape variant’ that could take the UK ‘some of the way backwards’ into the worst days of the pandemic.
He went on to say, ‘the further out in time we go, the more tools we have at our disposal from science, the less likely that is but you can never take that possibility completely off the table. But you know, science has done a phenomenal job so far and it will continue to do so.’
This is the one person through all of this I would listen to. I very much value his opinion – he’s been right so many times. Caution is the word right now.
What might this mean for the UK economy
As legal requirements are lifted many of the safety practises these laws introduced will likely remain.
So another full lockdown seems unlikely, I think. But any set back a mutated virus brings will very much hold the UK economic recovery back and that goes for global recovery too.
We are in the slow lane for economic growth. Covid curbs will likely return again for the UK.
As Prof Chris Whitty pointed out, ‘we are not out of the woods yet’.
See full report here.