Opening bell: Tech stocks sell off to continue as US policy tightens; BTC slips


  • Fed minutes revealed faster path to higher interest rates
  • Unusually, the bonds were sold with stocks
  • Advanced petroleum

Key events

After the latest Federal Reserve meeting minutes were released on Wednesday, US markets plunged, with the high-growth NASDAQ and the small-cap Russell 2000 each dipping more than 3%.

Most Asian benchmarks followed Wall Street lower on Thursday, while futures contracts remained in negative territory despite contracts in the, and rallied and at the time of writing were trading in positive territory … but narrowly. The report said the US central bank is more ready to tighten its policy, and sooner than expected.

The dollar stagnated while gold collapsed.

Global Financial Affairs

After a volatile session yesterday, US contracts this morning reduced earlier losses as Dow and S&P contracts faltered but moved into positive territory. Russell futures are currently outperforming although they have also fluctuated. At the time of writing, contracts on the NASDAQ 100 are lagging behind.

This paradigm may suggest that while investors turn tech capital into value stocks on the Dow Jones, they are undecided about domestic companies listed on the Russell 2000, as they are most susceptible to any deadlock in the midst of the market. current wave of coronavirus globally due to the Omicron a variant. Additionally, the NASDAQ 100 and the Russell 2000 outperformed in 2021, with investors moving between the extremes of growth and value.

In Europe, the index opened 1.25% lower after minutes revealed US policymakers were more hawkish than investors thought. Fed members focused on the tough and stubborn recruiting environment that could lead to interest rate hikes sooner than the market expected.

Perhaps most prominent in the minutes was the Fed’s desire to reduce its holdings of treasury bills and mortgage-backed securities by $ 8.3 trillion, drying up available liquidity.

The post caught the equity market off-guard – something the Fed is trying to avoid – after the central bank announced accelerated cuts to its stimulus package last year and shortened the timeline for rate hikes. of interest.

Traders were forced to readjust portfolios, including quickly offloading stocks and bonds. Longer-term Treasuries suddenly looked more expensive, as the dollar was set to rise and current yields became unattractive in an environment of higher rates. Shorter-term bonds have performed better as investors are not locked in, so their funds will be available for new issues whose payouts reflect higher interest rates.

After outperforming last year, technology and small caps underperformed yesterday.

The rating yield reached 1.7444, the same as March 31, 2021, which was the highest since January 24, 2020, when COVID-19 was just a problem in Asia.

Rates are offering an upward breakout of their downtrend line from the October 21 high, suggesting further bond selloff. T-bills were dumped alongside stocks as investors had to break their current positions, a rare event as both asset classes typically have negative divergence.

The continues to meander. However, the expected tightening environment around the greenback pushed lower.

GBP / USD Weekly

The reversal comes precisely to the neckline of an H&S weekly top.

Given that this is the dollar’s largest counter in the Dollar Index, the USD is flat as investors factored in the a through the ECB.

The minutes of the FOMC meeting also pushed down.

Daily Gold

The price of the yellow metal is at its rounding low.

completed a massive H&S summit with a lower implied target of around $ 30,000. The $ 40,000 mark could be used as a filter.

Daily Bitcoin

If the price falls below this level, the odds increase dramatically for.

rebounded from a previous sell-off, rising for the fourth day in a row, but it could still trade in a bearish configuration.

Daily Oil

The price can develop a high. In December 2021, the forecast slightly higher prices for this year.

Up to the front

  • Eurozone figures are released on Friday.
  • US are released on Friday.
  • Canadian figures are printed on Friday.

Market movements

Actions

  • STOXX 600 is down 1.1%
  • S&P 500 futures have not changed much
  • NASDAQ 100 futures fell 0.2%
  • Futures contracts on the Dow Jones Industrial Average have changed little
  • The index fell 1.4%
  • The index fell 0.7%

Currencies

  • The Dollar Index rose 0.1%
  • The price has changed little to $ 1.1307
  • The 0.2% decline to 115.86 per dollar
  • The increase of 0.2% to 6.3859 per dollar
  • The 0.2% drop to $ 1.3523

Obligations

  • The yield on 10-year treasury bills rose two basis points to 1.72%
  • Germany’s yield rose two basis points to -0.06%
  • UK yield rose four basis points to 1.13%

Merchandise

  • WTI crude rose 0.3% to $ 78.08
  • rose 0.2% to $ 80.94 per barrel
  • fell 0.9% to $ 1,794.32 an ounce


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