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Dow Falls Nearly 900 Points, Oil Drops as Delta Variant Sends Investors Into Bonds


Stocks, oil prices and government-bond yields slid Monday as anxiety mounted over the spread of the Delta coronavirus variant and its potential impact on the global economy.

The Dow Jones Industrial Average slumped 876 points, or 2.5%, in afternoon trading, putting the index on track for its worst one-day drop in point terms since October.

The S&P 500 fell 2%, while the technology-heavy Nasdaq Composite declined 1.3%. Monday’s losses marked an acceleration after U.S. stock indexes retreated last week, snapping a three-week winning streak.

Investors sheltered in the safety of government bonds. The yield on 10-year Treasury notes fell to 1.182%—its lowest level since February—from 1.30% Friday. Bond yields fall when bond prices climb.

Oil prices fell after the Organization of the Petroleum Exporting Countries and a Russia-led group of big producers agreed to raise production. Futures on Brent crude, the international benchmark, tumbled 6.7% to $68.68 a barrel, their lowest level in more than six weeks.

The moves were reminiscent of trading patterns that prevailed in the early days of the pandemic. Investors sold shares of companies directly affected by restrictions on movement and business, while buying government bonds and stocks that stood to benefit from renewed lockdowns.

American Airlines Group,


AAL -4.51%

United Airlines

and cruise operator

Carnival

were all down at least 4.5%. Energy producers

Marathon Oil

and

Occidental Petroleum


OXY -5.09%

both tumbled more than 5%.

Stocks that climbed included supermarket-chain

Kroger,


KR 3.71%

which rose 3.4%, and online-crafts marketplace

Etsy,


ETSY 2.80%

which was up 2.8%.

Surging cases of the coronavirus in many parts of the world, including highly vaccinated countries such as the U.K., have prompted investors to dial down their expectations of economic growth in the coming months. Last week, some of California’s most populous counties either reimposed mask mandates or recommended wearing masks indoors to fight the Delta variant.

“The emergence of this more highly transmissible Delta variant…has brought into the question the sustainability of this reopening and the recovery,” said

Candice Bangsund,

a portfolio manager at Fiera Capital. Still, she said the variant would delay rather than derail a big pickup in economic activity and called the selloff a chance to scoop up shares of energy producers, industrial firms and financial companies.

The inflation rate reached a 13-year high recently, triggering a debate about whether the U.S. is entering an inflationary period similar to the 1970s.

Despite Monday’s selloff, the S&P 500 is up more than 12% this year and closed at a record just one week ago.

“The market has been due for a pause or pullback or, dare I say it, a correction,” said Hans Olsen, chief investment officer of Fiduciary Trust.

Some investors also are concerned that rising prices will pinch consumption and prompt central banks to withdraw stimulus, creating an environment of lower growth and higher inflation in which stocks tend to struggle.

Inflation accelerated to a 13-year high in the U.S. in June. Some evidence suggests that the price increases have started to knock consumers’ confidence in their ability to keep spending. For much of 2021, business reopenings, rising vaccination rates and government pandemic aid have helped propel rapid gains in consumer spending, the economy’s main driver.

“What you’re seeing is a sense that the consumer is starting to be affected quite significantly” by the jump in prices, said

Sebastien Galy,

senior macro strategist at Nordea Asset Management.

All 11 sectors of the S&P 500 dropped Monday. Energy and financials were the worst-performing groups.

One bright spot was

Five9,


FIVN 6.13%

which jumped 4.8% on news that

Zoom Video Communications


ZM -2.43%

plans to buy the provider of cloud-based customer-service software in a deal valuing the firm at $14.7 billion. Zoom shares shed 4.1%.

The National Bureau of Economic Research said Monday that the U.S. officially climbed out of a recession in April 2020. The pandemic-driven recession was two months long, making it the shortest on record, according to the bureau, the official arbiter of U.S. recession dates.

Looking ahead, investors will be monitoring corporate earnings this week for signs of how companies are faring amid the revival of economic activity. Air carriers American and United are among the hundreds of companies set to report quarterly results this week, along with

Intel,


INTC -1.08%

Netflix


NFLX -0.15%

and

Chipotle Mexican Grill.


CMG -1.45%

Overseas, major stock markets retreated amid fears of the Delta variant. The Stoxx Europe 600 slid 2.3%, dragged down by shares of travel, leisure and commodities companies, as well as banks.

In Asia, technology giants

Alibaba

and

Tencent

weighed on Hong Kong’s Hang Seng Index, which fell 1.8%.

Surging Covid-19 cases in many parts of the world have prompted investors to dial down economic growth expectations.



Photo:

Richard Drew/Associated Press

Japan’s Nikkei 225 dropped 1.3%. More athletes and staff members attending the Tokyo Olympics have tested positive, while cases are surging in Indonesia. Sydney, Australia’s most populous city, is under lockdown because of a Delta outbreak.

David Chao, a market strategist at Invesco, said the spread of the Delta variant across Asia, coupled with low vaccination rates and expectations of additional social-distancing measures, has “taken wind out of the sail for many investors expecting an economic rebound” in the region.

Mr. Chao said he expected investors to continue to pull funds out of Asian stocks and shift them to shares in developed markets with high inoculation rates, such as the U.S. and U.K.

Write to Joe Wallace at [email protected], Alexander Osipovich at [email protected] and Frances Yoon at [email protected]

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8



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Netflix Is Reportedly Eager To Expand Into Video Games


Streaming giant Netflix is reportedly eager to go beyond the film and television industry.

This is according to a report from The Information, which cites sources who are “familiar with the situation”. The site says Netflix is seeking a video game executive and has supposedly already reached out to various people within the games industry.

Netflix is apparently considering offering a series of games (similar to the likes of Apple Arcade) that would be made available on its own subscription service.

The streaming giant shared the following statement with Polygon, stating how it was excited to do more with “interactive entertainment”.

“Our members value the variety and quality of our content. It’s why we’ve continually expanded our offering — from series to documentaries, film, local language originals and reality TV. Members also enjoy engaging more directly with stories they love — through interactive shows like Bandersnatch and You v. Wild, or games based on Stranger Things, La Casa de Papel and To All the Boys. So we’re excited to do more with interactive entertainment.”

Whether or not Netflix would succeed within this area is another question altogether. Game Pass, as our sister site Pure Xbox notes, is often considered as ‘the Netflix of video gaming’. Then there are other services like EA Play and the dedicated streaming service Google Stadia, which essentially flopped.

Would you be interested in a Netflix gaming service similar to something like Apple Arcade? Share your thoughts down below.





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The Elder Scrolls Netflix Series Reportedly in Development


Between The Witcher, Castlevania, and the upcoming Assassin’s Creed and Resident Evil TV shows that are currently in production, Netflix has become a hotbed of content that is based on popular video game franchises. Now, a fresh rumor suggests that this trend could be continuing once again with a new series centered around one of gaming’s most iconic fantasy properties.

A new report has stated that Netflix is looking into partnering with Bethesda to create a new series based on The Elder Scrolls series of video games. First started back in 1994, The Elder Scrolls has been one of Bethesda’s longest-running franchises with standout entries in the mainline series including Morrowind, Oblivion, and Skyrim. When it comes to what the show would entail, it would be of the live-action variety. Netflix is also said to want this show to be just as massive as The Witcher if it were to come to fruition.

As for where the rumor stems from, it comes by way of one Daniel Ritchtman. In the past, Ritchtman has proven to be a pretty reliable source and has had scoops related to the film and television industries ahead of time. So while you should definitely take this report with the usual grain of salt, there could very well be some validity to it.

In terms of how Bethesda might approach a situation like this, well, there’s a track record showing that they might be willing to play ball with Netflix. For those who don’t remember, Bethesda actually announced in 2020 that it is working with Amazon to create a TV series based upon its other major franchise, Fallout. While it remains to be seen if the publishing label would want to work with two separate streaming companies to create TV shows simultaneously, the previous move shows that it’s at the very least interested in exploring the television realm a bit more.

Obviously, there’s no confirmation that any of this is happening just yet, but if this does come to fruition, you imagine we’d hear more officially from Bethesda or Netflix in the future. Until then, if you’d like to keep up with all of our other coverage dedicated to The Elder Scrolls, you can do so by following our hub right here.

Would you like to see a live-action TV series based upon The Elder Scrolls’ world of Tamriel? Let me know in the comments or hit me up on Twitter at @MooreMan12 to chat more.

[H/T Gaming Bible]





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Dow Futures Are Softer Amid a Fed and Treasury Clash


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