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Seeking Alpha 2022-11-28 16:12:57

Nasdaq, S&P, Dow fall on China unrest; eyes also on crypto after BlockFi bankruptcy

U.S. stocks slipped on Monday as sentiment was weighed down by concerns over China's COVID-19 lockdowns and reports of protests, with the news also weighing on crude prices. Cryptocurrencies were also in focus after lender BlockFi filed for bankruptcy. Markets are coming off a holiday-shortened Thanksgiving week which saw all three major indices make muted gains amid a lull in trading. The tech-heavy Nasdaq Composite ( COMP.IND ) was down 0.88% at 11,127.92 points in morning trade. The benchmark S&P 500 ( SP500 ) was 0.89% lower at 3,990.32 points, while the blue-chip Dow ( DJI ) f ell 0.73% to 34,096.32 points. With the exception of Consumer Discretionary, all 11 S&P sectors retreated. Energy was the top loser, weighed down by worries over Chinese demand. Reports of protests against China's tough COVID measures in cities such as Beijing and Shanghai have rattled overall global sentiment. "China stocks have tumbled today, largely as a result of the COVID-19 protests," David Townsend, managing director of EMEA Business at Value Partners Group, said. "However, there has recently been a dramatic change in market sentiment, with policymakers in China unleashing different sets of policy support for private property developers. In addition, while the country is still maintaining its rhetoric on the 'dynamic zero-Covid policy', it also released measures to fine-tune the policy. These, together with the lower-than-expected CPI figures in the US last month (which ignited renewed expectations of monetary policy pivoting in the US), have stimulated a strong 'risk on' momentum in the China stock market," Townsend added. U.S.-listed Chinese tech stocks such as Alibaba ( BABA ), JD.com ( JD ) and Bilibili ( BILI ) made modest gains . Crypto lender BlockFi filed for bankruptcy on Monday, putting pressure on crypto markets. Bitcoin ( BTC-USD ) was down about 3%. Ethereum ( ETH-USD ) fell over 4% following a large ETH transfer to Binance. Shares of Apple ( AAPL ) slipped ~2% after a Bloomberg report said production of iPhones could face a shortfall by as many as 6M units due to unrest at the tech giant's Chinese manufacturing hub. Turning to the bond markets, rates were down but off their lows. The 10-year Treasury yield ( US10Y ) was down 1 basis point to 3.69% and the 2-year yield ( US2Y ) was down 3 basis points to 4.45%. In economic data, the calendar is very light. The November Dallas Fed Manufacturing Survey came in at -14.4 versus a prior reading of -19.4. St. Louis Fed President James Bullard and New York Fed President John Williams speak mid-day. "Federal Reserve President Williams speaks at the New York Economics Club. Economists have clubs because they are sorta social - demented and sad, but social," Donovan said, channeling "The Breakfast Club." "Fed Chair Powell’s comments on Wednesday may get more attention, but Williams’ comments (and those of Brainard two weeks ago) are more likely to set out medium-term thinking." Consumer stocks were also in focus as shoppers transition from Black Friday to Cyber Monday. Reuters said that spending on Cyber Monday may hit a record $11.6B, citing a report.

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