bear stock market

Summary:

  • Volatile month for the US stock market.
  • The easing of lockdowns will benefit not only China’s economy but economies that rely on China for trading, such as the NZD.

Read next: EuroZone Inflation Exceeds Market Expectations (EUR/USD) (EUR/GBP), New Zealand Economy Will Benefit From China’s Lockdown Easing (GBP/NZD), GBP Bullish (GBP/USD) 

The NASDAQ is reflecting the volatility of the financial markets.

The NASDAQ is one of the indexes that has been caught in volatile trading on Tuesday. During trading on Tuesday, the NASDAQ turned positive, however, the positive turn was short-lived for the index. Despite managing to recover some of the losses seen this month, May has been a volatile month for the stock markets, concerns over decade-high inflation and fears that the hawkish Federal reserve’s moves to fight rising prices through raising interest rates may tip the US economy into a recession.

(IXIC) NASDAQ Caught In Tuesdays Volatile Trading, New Zealand Dollar (NZD) - 1 NASDAQ Price Chart

New Zealand Dollar

The NZD benefitted of Monda

Germany's Economic Déjà Vu: A Look Back and a Leap Forward

Bear market Friday

Jeffrey Halley Jeffrey Halley 06.05.2022 10:22
Equity markets take a tumble It’s a little hard to know where to start today after a massive risk aversion wave swept markets overnight, so let’s start where I believe the rot really began, the Bank of England policy decision overnight. The Bank of England raised rates by 0.25% to 1.0% in a split decision (three members wanted 0.50%), which was in line with expectations. It’s what they said, and not what they did, that saw sterling slump by 2.0%. The bombshell was the 2023 growth forecast, which was marked down massively to -0.25% from 1.25% previously.   The BOE basically said there was going to be a recession next year, somewhat at odds with the Federal Reserve’s statements that a soft landing was possible in the US. Overnight BOE officials basically said they were going to concentrate on tackling inflation because there wasn’t much they could do to offset a slowdown. UK consumers would, unfortunately, have to endure rising costs of living and recession headlock that would make Stone Cold Steve Austin proud. It is of little surprise that the BOE doesn’t intend to start reducing its GBP 875 billion balance sheet yet. The only positive being the BOE will likely hike rates in small increments and let markets themselves do most of the dirty work.   That is somewhat at odds with Fed Chairman Powell’s comments that the Fed would be able to engineer a soft landing for the US economy as it scrambles to get on top of inflation. Given the economics PHDs were adamant that inflation was “transitory” last year, I’m struggling to fully buy into that, and so it seems, is the street. I argued yesterday that hiking rates by 0.50% a meeting while scaling up quickly to sell USD 95 billion of bonds and MBS a month off their balance sheet wasn’t dovish at all. Also, Mr Powell’s comments had left plenty of wiggle room to hike by 0.75% if needed. 0.50% hikes could be as “transitory” as inflation. Markets seemed to come to that realisation overnight, US 10-year yields climbed back through 3.0% and stayed there, and everyone knows about the bonfire in equity markets.   The Reserve Bank of India blinked on inflation this week as well with their unscheduled rate hike. I actually applaud them for this; there’s no shame in effectively admitting you were incorrect and acting decisively to sort the mess out. Even an ECB member said overnight that a rate hike would be considered at the June meeting. Considering and doing are two different things though, although if EUR/USD is around parity, their thoughts might be focused. However, their rightful get-out-of-jail card is that they are rapidly moving to oversight of a pseudo-wartime economy.   Master fence-sitting vacillators, the Reserve Bank of Australia, though, haven’t made too many friends with their guidance. Hiking rates by 0.25% earlier this week, while still playing the dovishly hawkish card. The RBA Statement of Monetary Policy this morning though, told a rather different message and I’m wondering if they were hoping nobody was watching because it’s Friday. It massively raised trimmed mean inflation forecasts to 4.75% by December 2022, and 3.25% by December 2023, with core-inflation remaining above the 2-3% target band until 2024. It said it was appropriate to start normalising interest rates and that further increases would be needed to restrain inflation. Australian equities would have been battered today after the Wall Street slump overnight anyway but would probably have suffered a similar fate anyway after the RBA SoMP release.   Slowly but surely, the central bank fence-sitters are being dragged into the inflation fight, even if they are fighting dovish rear guard actions. The reality that inflation has returned to the world after 20 years, that the 15 year run of the cost of capital is zero per cent is over, or that we can no longer rely on central banks to reverse flow wealth transfers to homeowners and equity investors and corporate debt Caligula’s via quantitative easing, appears to be dawning on the world. We may well have reached peak globalisation and with China slowing, a process in place pre-covid-zero I might add, and a war in Eastern Europe that will price shock the world’s food and energy value chains, it is little surprise that equity markets might be having second thoughts about valuations, even at these levels.   And still, the week isn’t over, with US Non-Farm Payrolls still to come. Market expectations are for around 400,000 jobs to be added, roughly the same as March, with unemployment edging lower to 3.50%. A sharp divergence, up or down, from the median forecast, should produce a very binary outcome given the schizophrenic nature of the short-term financial markets at the moment. A print north of 500,000 should provoke a faster tightening by the Fed possible recession equals selling equities, bonds, gold, cryptos, DM and EM FX, buy US dollars reaction. Conversely, a print under 300,000 should see a sigh of relief less Fed tightening rally. Buy equities, bonds, gold, cryptos, DM and EM currencies and sell US dollars. It’s that sort of market.   Thankfully, most of us still have our weekends free, but if one wants to watch the direction of travel for market sentiment, the crypto-space this weekend might be interesting to watch, especially if we get some headline bombs. Bitcoin held support perfectly ahead of support at USD 37,400.00 on Wednesday, rising 5.20% in the general post FOMC relief rally. Overnight, it lost around 8.0% and traded as low as USD 35,600.00, crashing through the triangle support at USD 37,400.00. Negative developments over the weekend could spur a sell-off to around USD 32,000.00 settings Monday up for a bad start. If risk sentiment continues plummeting, the chicken bones on the technical charts suggest bitcoin could be on its way to USD 28,000.00 and then USD 20,000.00. HODL on for dear life.   This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Stock Market Showing Signs Of Slight Recovery Amidst U.S CPI Report Release

Stock Market Showing Signs Of Slight Recovery Amidst U.S CPI Report Release

Rebecca Duthie Rebecca Duthie 11.05.2022 18:05
Summary: S&P 500 has seen 0.72% growth today. The value of (XAUUSD) gold has shown bullish signals in the market today. Read next: Tech Stocks Plunging!? Trade Desk Earnings Announcement Pushes Tech Giant Stock Down, Russian Ruble Strengthening and Ford Motor Co.  S&P 500 is rising during trading today The U.S CPI report which offered an update on price increases across U.S for April was released by the U.S labour department on Wednesday. The report reflected there was some deceleration of inflation figures compared to March, however, the rate of price increases exceeded analyst expectations. The CPI for April decelerated marginally compared to the March figures. The figures represent how far the Fed will have to go in the future regarding tightening monetary policy to fight the rising prices. S&P 500 Price Chart Will Gold rally in the wake of the CPI report? Gold futures have increased in value today, the initial increase came before the CPI report was released by the U.S labor department, and the increase has continued after the release. The lower than expected CPI figures bode well in the favour of the gold prices as uncertainty arises amongst investors on the Fed's next move. With volatility in the stock markets likely to continue, perhaps investors are trying to hedge their bets, driving the price of gold upwards. Gold Futures Jun’22 Read next: (BTC) Bitcoin’s Price Tanks Along With Equities. U.S. Stock Market Awaits CPI Report, Poor Performance From The FTSE 100.  Sources: Finance.yahoo.com
MSFT Stock Price Analysis: Bearish Signals Point to Potential Decline

(IXIC) NASDAQ Caught In Tuesdays Volatile Trading, New Zealand Dollar (NZD)

Rebecca Duthie Rebecca Duthie 31.05.2022 21:09
Summary: Volatile month for the US stock market. The easing of lockdowns will benefit not only China’s economy but economies that rely on China for trading, such as the NZD. Read next: EuroZone Inflation Exceeds Market Expectations (EUR/USD) (EUR/GBP), New Zealand Economy Will Benefit From China’s Lockdown Easing (GBP/NZD), GBP Bullish (GBP/USD)  The NASDAQ is reflecting the volatility of the financial markets. The NASDAQ is one of the indexes that has been caught in volatile trading on Tuesday. During trading on Tuesday, the NASDAQ turned positive, however, the positive turn was short-lived for the index. Despite managing to recover some of the losses seen this month, May has been a volatile month for the stock markets, concerns over decade-high inflation and fears that the hawkish Federal reserve’s moves to fight rising prices through raising interest rates may tip the US economy into a recession. NASDAQ Price Chart New Zealand Dollar The NZD benefitted of Monday in the wake of China’s easing of COVID-19 lockdowns, strengthening against the Pound Sterling and other currencies. The easing of lockdowns will benefit not only China’s economy but economies that rely on China for trading, New Zealand's economy is one of those who will benefit. The strengthening of China's Renminbi has also offered support to the NZD/USD currency pair, the US Dollar is struggling at the moment, and therefore, the recovery of the NZD has been noticeable. Sources: finance.yahoo.com, poundsterlinglive.com

currency calculator