U.S. equity markets are starting off the shortened trading week lower as investors continue to worry about the impact the delta variant of COVID-19 might have on the economic recovery. The Dow is down more than 250 points. The S&P 500 is also in the red.

Goldman Sachs (GS) reduced its forecast for U.S. GDP this year, saying the rising delta variant cases will likely slow consumer spending. Morgan Stanley (MS) cut its recommendation for U.S. equities to underweight because of what it calls the end of a mid-cycle transition for stocks.

Big industrial firms including 3M (MMM) and Caterpillar (CAT) are falling. Boeing (BA) shares are declining 2.5% after Ryanair (RYAAY) ended negotiations over the purchase of new MAX jets (more below). Shares of drugmakers Amgen (AMGN) and Merck (MRK) are down more than 2%.

Tech stocks are getting a lift from shares of Netflix (NFLX), which are rising 3.5%, and Tesla (TSLA), up 2.5%. Shares of Apple (AAPL) and Amazon (AMNZ) are both 1% higher.

Crude oil is down more than 1%, dragging energy company stocks lower. The yield on the 10-year Treasury note is up more than five basis points to 1.378%. It hasn’t finished that high since mid-July.

Investors in Bitcoin did not get the hoped-for boost from El Salvador making the cryptocurrency legal tender in that country starting today. The price is down more than 8%.

Chart courtesy CoinDesk

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China’s exports soared to record levels last month.

China’s General Administration of Customs reported exports rose 25.6% from last year to $294.3 billion. Economists surveyed by Bloomberg anticipated a 17.1% increase. The gains came despite a resurgence of COVID-19 cases that caused disruptions at China’s second-largest port.

Demand was strong from both the U.S. and Europe, which analysts say may have been driven by retailers stocking up ahead of the key holiday shopping season. 

Import Record, Too

Chinese imports also set a record in August, jumping 31.1% to $236 billion. Overall, China’s trade balance was a net positive of $58.3 billion.

Officials said electronics, high-tech products and clothing were the top exports, with electronics and high-tech products the biggest imports.

Boeing (BA)

A dispute with Ireland’s Ryanair (RYAAY) over the price of its 737 MAX 10 jets could cost Boeing (BA) billions of dollars in sales.

Europe’s largest discount carrier announced it has ended discussions to buy as many as 250 of the largest version of the Boeing plane, which at list price would potentially be worth $33 billion. Even with typical industry discounts, analysts say the deal would top $10 billion.

Ryanair CEO Michael O’Leary said while the company is disappointed, it has a “disciplined track record of not paying high prices for aircraft.”

A Boeing spokesperson used the same term, saying that while Ryanair is a longstanding partner, the plane maker continues to be "disciplined" and make decisions that make sense for its customers and company.

Already a Customer

Ryanair already has an order for 210 of the smaller MAX 8-200 jets, and is one of the largest customers for the MAX aircraft in the world.

Another big Ryanair purchase would have been a boost for the troubled MAX, which had been grounded for almost two years after a pair of deadly crashes. The U.S. Federal Aviation Administration (FAA) cleared it to begin flying again last November.

Shares of Boeing are down 2.5%, while Ryanair shares are flat.

September 7, 2017

On this day in 2017, Equifax, one of the three biggest U.S. consumer credit reporting agencies, announced it had been hit with a cyberattack which may have impacted as many as 147 million people.

Equifax said the hackers got access to sensitive personal information, including credit card, Social Security, and driver’s license numbers. An investigation found the criminals exploited a weak point in the company’s website software to gain access. 

Equifax eventually agreed to a court settlement requiring the company to pay more than a billion dollars to compensate consumers and government agencies, and to improve its data security. The provisions of the deal included credit monitoring for those affected, and direct payments in cases of identity theft from the hack.

Source: New York Times, Reuters

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September Effect

The September effect refers to historically weak stock market returns for the month of September. There is a statistical case for the September effect depending on the period analyzed, but much of the theory is anecdotal. It is generally believed that investors return from summer vacation in September ready to lock in gains as well as tax losses before the end of the year. There is also a belief that individual investors liquidate stocks going into September to offset schooling costs for children. As with many other calendar effects, the September effect is considered a historical quirk in the data rather than an effect with any causal relationship. 

The Investopedia Express With Caleb Silver

On the Express this week, what a slowdown in hiring means for the U.S. economy and the stock market. Kenny Polcari rejoins the show with his forecast. And, how young is too young to teach kids financial literacy? Courtney Hale, the Chief Hope Officer of SuperMoneyKids joins the show, and he says the earlier the better.