US Opening Bell: Tech Sell-Off Will Continue As US Policy Tightens; BTC slips

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

Key events

After the release of the latest Federal Reserve meeting minutes on Wednesday, US markets plunged, with the growth-stock-rich NASDAQ and small-cap Russell 2000 each plunging more than 3%.

Most Asian benchmarks followed Wall Street lower on Thursday, while futures contracts remained in negative territory although contracts for , rallied and, at the time of writing, were trading in negative territory. positive territory… but fair. They indicated that the US central bank is more willing to tighten policy, and sooner than expected.

The dollar was flat while gold plummeted.

Global Financial Affairs

After a volatile session yesterday, US contracts this morning pared earlier losses, with S&P and S&P contracts faltering but closing in on 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 although investors are rotating capital from the tech sector into value stocks on the Dow Jones, they are undecided about domestic companies listed on the Russell 2000 as they are the most sensitive to any foreclosure in the market. midst of the current coronavirus outbreak globally due to the Omicron. variant. Additionally, the NASDAQ 100 and Russell 2000 have outperformed in 2021 as investors move between the extremes of growth and value.

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

Perhaps the most impactful element of the minutes was the Fed’s drive to reduce its holdings of Treasuries and mortgage-backed securities by $8.3 trillion, drying up available liquidity.

The statement caught the stock market off guard – something the Fed is trying to avoid – as the central bank already last year announced the accelerated reduction of its stimulus program and shortened the deadline for raising interest rates. ‘interest.

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

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

The yield on the note hit a high of 1.7444, the same as March 31, 2021, which was the highest since January 24, 2020, when COVID-19 was only an issue in Asia.

Rates are offering a break up of their downtrend line from the Oct. 21 high, suggesting continued bond selling. Treasuries were undervalued along with equities as investors had to exit their current positions, a rare occurrence, since the two asset classes typically exhibit negative divergence.

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

GBP/USD Weekly

The reversal occurs precisely at the neckline of an H&S weekly high.

Since the dollar is the main counterweight to the dollar in the dollar index, the USD is stable as investors anticipate a rate hike by the ECB.

FOMC meeting minutes also pushed lower.

Daily Gold

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

completed a massive Health & Safety high with the implied target aiming lower towards $30,000. The $40,000 mark could be used as a filter.

Daily Bitcoin

If the price falls below this level, the chances increase significantly for a continued sell-off.

rebounded from an earlier selloff, up for the fourth day in a row, but it could still trade in a bearish pattern.

Daily Oil

The price may develop a top. In December 2021, the Federal Reserve Bank of Dallas predicted slightly higher prices for this year.

Up to the front

  • On Friday, the euro zone figures are published.
  • The United States is released on Friday.
  • The Canadian figures are printed on Friday.

Market movements

Shares

  • The STOXX 600 fell 1.1%
  • S&P 500 futures are little changed
  • NASDAQ 100 futures fell 0.2%
  • Dow Jones Industrial Average futures are little changed
  • The index fell 1.4%
  • The index fell 0.7%

Currencies

  • The Dollar Index rose 0.1%
  • The was little changed at $1.1307
  • The decline of 0.2% to 115.86 per dollar
  • Rising 0.2% to 6.3859 per dollar
  • The fell 0.2% 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%
  • The UK yield rose four basis points to 1.13%

Merchandise

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

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