Stocks tread water due to the slide in gold and oil prices.

Stocks are stagnating as gold and oil prices drop, causing investors to lose confidence.

On Monday, global stocks prices remained flat as significant drops in gold and oil prices, as well as fears over the spread of the Delta coronavirus strain, dampened the mood.

The MSCI World Index of stocks fell 0.03%

Oil prices plummeted as much as 4%, continuing the previous week’s severe losses due to a rising US dollar and fears that additional coronavirus-related limitations in Asia, particularly China, might impede a worldwide rebound in fuel consumption.

Gold dropped to a more than four-month low after solid job statistics in the United States boosted hopes for an early reduction of the Federal Reserve’s economic stimulus measures.

Spot gold dropped 1.9% to $1,729.09 per ounce. Gold futures in the United States settled 2.1% down at $1,726.50.

Bitcoin has reached a three-month high after breaking past the $US46,000 barrier overnight.

The robust employment statistics has also led US Treasury rates to increase.

Over the weekend, Chinese trade statistics fell short of expectations, while numbers released on Monday showed inflation dropped to 1% in July, removing any impediment to additional policy support.

The United States Senate moved closer to adopting a $1 trillion infrastructure plan, though it still has to be approved by the House.

Investors were still debating whether Friday’s strong U.S. payrolls data would push the Federal Reserve one step closer to unwinding its stimulus program. 

LONGER TAPER

The speed of tapering, on the other hand, was still up in the air and would determine when an actual rate hike occurs, he added. Because the Fed is purchasing $120 billion in assets each month, a $20 billion taper would finish the program in six months, while a $10 billion cut would take a year.

The expansion of the Delta variety may argue for a longer taper, with cases in the United States returning to levels observed during last winter’s spike, with more than 66,000 people hospitalized.

The July CPI data, which is due this week, is anticipated to indicate that inflation has peaked, with prices for used automobiles finally dropping after significant increases.

Four Fed officials are scheduled to speak this week, which will undoubtedly provide ample grain for markets seeking for indications on the timing of tapering.

Companies with earnings beats, on the other hand, have had muted reactions on their stock price the day after results releases, while misses have been penalized,” they stated in a note.