Bond Yields, Oil Majors, Meme Stocks: 3 Things to Watch

Investors fled risk on Thursday amid a growing outbreak of Covid cases sweeping the U.S. and the U.K. that threatened to blunt progress on the economic recovery.

The 10-year U.S. bond yield fell to its lowest level since February before recovering some of that ground later in the day. Rates move inversely to prices. The recent move lower in rates comes as expectations for reflation and growth ease, forcing investors to abandon their bearish bets on the bonds.

The outlook on growth has also been soured by a spike in Covid-19 cases as the delta variant first identified in India continues to spread, threatening the summer of travel. Public health officials in the U.S. have urged communities with low vaccination rates to get their shots.

While falling bond yields are normally good for tech stocks, it wasnt the case on Thursday, as giants like Facebook (NASDAQ:FB) and Microsoft (NASDAQ:MSFT) fell.

Cryptocurrency sensitive stocks were hurt by a plunge in bitcoin, as well.

• Here are three things that could affect markets:

1. Attention on bond yields

Eyes will be on the Treasury market after the benchmark United States 10-Year fell Thursday to 1.25%, a level not seen since February, as worries over the pace of global economic rebound increase and investors look for safe havens.

Even as vaccinations quicken and people return to work and travel, the fast spread of the delta variant of the coronavirus is the latest headache for policymakers, bankers and economists in balancing growth and inflation targets.

Japan declared a state of emergency today in Tokyo.

2. Energy in focus

Shares of energy companies are also trading weaker as worries over global economic growth return. That has weighed on majors such as Chevron Corp (NYSE:CVX), Exxon Mobil Corp (NYSE:XOM) and Royal Dutch Shell (LON:RDSa) PLC ADR (NYSE:RDSa).

Crude oil rebounded a bit, around $73 a barrel for Crude Oil WTI Futures and $74 for the international benchmark Brent Oil Futures after a bullish inventory report that showed declining crude stocks in the last week.

3. Is the meme trade over？

AMC Entertainment Holdings Inc (NYSE:AMC) and GameStop Corp (NYSE:GME) shares plunged earlier Thursday only to recover in the afternoon, but the extra volatility comes as investors debate whether the rally in meme stocks is finally over.

AMC hit a 52-week high of $72.62 on June 2 and has since come down to around $47, the fall also fueled by traders disappointed over its constant fund raising. Two days ago, the multiplex operator called off one such sale of 25 million shares.

Stay tuned!