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Stock Markets Drop as COVID-19 Cases Hit High

A new wave of closures would severely affect sectors such as retail, which barely saw its sales grow in October

This Tuesday financial markets opened downward after the Dow Jones Industrial Index (which measures the average share price of companies in the US industry) reached a record after the announcement of 95% of the effectiveness of the Moderna vaccine.

The index fell nearly 400 points after rising more than 470 on Monday. The decrease in the main financial indices goes hand in hand with the increase in COVID-19 infections in the country.

Markets drop while COVID-19 cases soar

On Monday, the United States reported more than 166,000 new cases of coronavirus. In the event that the number of daily infections does not decrease, more restrictions are expected throughout the country.

The sharp decline in markets, some analysts say, was caused by the announcement of several states to re-implement mobility restrictions to combat the spread of coronavirus infections.

Several California counties have already begun banning any meeting that is not strictly essential or work related, leading to rejection by small business owners strongly affected by the drop in their sales.

A new wave of closings would severely affect sectors such as retail, which barely saw its sales grow in October and expects mediocre growth, just 1%, for Christmas, compared to historical growth of 4% during this season.

Mercados, COVID-19
On Monday, the United States reported more than 166,000 new cases of coronavirus. (AFP)

As part of Operation Warp Speed, Moderna and Pfizer vaccines are waiting for approval of use by the Food & Drugs Administration (FDA) to be distributed as part of the project, launched by the Trump administration.

Secretary of the United States Department of Health Alex Azar said Monday that the FDA is working “as fast as possible” to approve vaccines for emergency use.

Despite expectations of a vaccine, the available inventory may not be sufficient for the start of its distribution to prevent further closings in the near future.

Meanwhile in Washington

Despite expectations for a new stimulus package to serve companies and people affected by the pandemic, Congress does not appear to be close of reaching an agreement on the amounts to inject into the economy.

Senate Majority Leader Mitch McConnell bets on a small focused $ 500 million program, House Speaker Nancy Pelosi pressures for a $ 2.2 trillion program, which would include a new check of $ 1,200 for low-income or middle-class individuals, with a maximum of 6,000 per family.

As the debate continues in Washington, markets are await for the approval of a new vaccines and a stimulus package that seems to be far from being approved in a moment when it’s needed the most, but not according to politicians timing.

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