Markets USA / The stock market continues to fall – the impact of inflationary shocks continues

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NEW YORK (DOW JONES) – The inflation shock at the end of the week continues to shape the start of the new week, which is reflected in renewed significant price losses: Shortly after the opening bell, the Dow Jones index loses 1.8 percent. The S&P 500 fell 2.2 percent. The Nasdaq Composite is down 2.5 percent. Consumer prices, which had risen faster than expected, fell on Wall Street on Friday. The data dashed hopes that inflation might be peaking. At the same time, he fueled fears that the US Federal Reserve could tighten monetary policy more aggressively to fight inflation.

Investors will receive more information on the Federal Reserve’s next steps following Wednesday’s interest rate meeting. The market is forecasting interest rates to rise by 75 basis points instead of the 50 basis points last indicated by the Fed. “Sentiment has changed dramatically,” said Peter Garnery, head of equity strategy at Saxo Bank. Market participants understood “we have a galloping food crisis” triggered by Russian actions in Ukraine. Meanwhile, China could continue to impose new lockdowns in the coming months, which will lead to increasing supply chain disruptions. Gary now believes there is great potential for a recession – as “the only option to suppress demand and inflation”.

An inverted yield curve is emerging on the bond market

Yields are rising sharply again on the bond market, especially at the shorter end of the yield curve. The yield gap between two-year and ten-year stocks has narrowed significantly. There is a risk of an inverted yield curve, which market participants see as a harbinger of a recession.

Uncertainty is driving investors into the dollar, popular as a safe haven currency in times of crisis. The dollar index rose further by 0.6 percent. Meanwhile, there is a huge cryptocurrency sell-off. Bitcoin fell about 12% to around $24,100. Crypto lending platform Celsius Networks has been forced to suspend withdrawals and transfers due to the price drop.

Oil prices were weighed down by speculation that demand will slow amid the negative impact of rising interest rates on the economy, but also renewed lockdowns in China. Additionally, a stronger dollar makes the commodity more expensive for non-dollar sector buyers.

In addition to a strong dollar, higher bond yields weigh on the price of gold. They reduce the attractiveness of the precious metal, which is held without interest.

Coinbase follows the cryptocurrency Down Under

Crypto trading platform Coinbase’s stock fell 17% amid a cryptocurrency selloff. The Tesla share cannot escape the negative mood and loses 3.8 percent. In after-hours trading on Friday, Titles benefited from the details of an upcoming stock split that would see one stock divided into three.

Investors are also skeptical about the medium-term goals of the New York Times (-3.3%), which among other things wants to increase its customer base to 15 million by the end of 2027. Slightly outperforming the market Choice Hotels International (-1.2%) followed the company’s announcement that it would acquire Radisson Hotel Group America for US$675 million. The group comprises 624 hotels with 68,000 rooms.

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Index Final +/-% Absolute +/-% YTD

DJIA 30,835.92 -1.8% -556.87 -15.1%

S&P 500 3,813.78 -2.2% -87.08 -20.0%

Nasdaq Comp. 11,061.07 -2.5% -278.95 -29.3%

Nasdaq-100 11,556.09 -2.3% -276.73 -29.2%

US Bonds

Term Yield Bp to VT Yield VT +/-Bp YTD

2 years 3.22 +15.1 3.07 248.6

5 years 3.41 +14.1 3.27 214.6

7 years 3.37 +13.3 3.24 193.3

10 years 3.28 +11.9 3.16 177.0

30 years 3.30 +10.7 3.19 140.2

Forex Last +/- % Mon 8:16 Fri 17:33 % YTD

EUR/USD 1.0458 -0.5% 1.0481 1.0518 -8.0%

EUR/JPY 139.94 -1.0% 141.11 141.12 +6.9%

EUR/CHF 1.0377 -0.1% 1.0367 1.0401 +0.0%

EUR/GBP 0.8582 +0.5% 0.8549 0.8538 +2.1%

USD/JPY 134.39 -0.0% 134.66 134.14 +16.8%

GBP/USD 1.2179 -1.1% 1.2261 1.2319 -10.0%

USD/CNH (Offshore) 6.7556 +0.3% 6.7552 6.7308 +6.3%

Bitcoin

BTC/USD 24,097.26 -11.9% 25,426.65 29,341.32 -47.9%

Rohl finally done by the vet. +/- % +/- USD % YTD

WTI/Nymex 118.82 120.67 -1.5% -1.85 +63.3%

Brent/ICE 120.54 122.01 -1.2% -1.47 +59.8%

Metals Last Day +/- % +/- USD % YTD . before

Gold (Spot) 1,854.42 1,871.40 -0.9% -16.98 +1.4%

Silver (Spot) 21.59 21.89 -1.4% -0.30 -7.4%

Platinum (Spot) 947.25 977.07 -3.1% -29.82 -2.4%

Copper Future 4.21 4.29 -2.1% -0.09 -5.3%

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DJG/DJN/CLN/FLF

(ENDS) Dow Jones Newswires

Jun 13, 2022 9:41 am ET (1:41 pm GMT)

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