U.S stocks closed basically flat, and a sharp rebound in late trading pushed the S&P 500 out of the brink of a bear market, but the index still fell for the seventh week in a row, setting a record for the longest losing streak since 2001. Earlier it fell from its closing high in January by Over 20%, meeting the usual definition of a bear market. The monthly expiry of options tied to stocks and ETFs added to price volatility as another week of volatile trading ended. Safe-haven buying drives U.S. Treasuries higher with the dollar
This week has been marked by buying the dips and selling the rallies, as investors worry about a slowing economy and further monetary policy tightening, while retailers signal that high inflation is taking its toll on profit margins and consumer spending.
The S&P 500 seven-week losing streak is the longest losing streak since the dotcom bubble burst more than two decades ago. According to Bespoke Investment Group, this is only the fourth time it has fallen for seven weeks or more since World War II. That's a small sample size, but no such move has occurred during a particularly positive period for the stock market, the strategists said in a note, rooted in a hawkish FOMC stance and heightened fears of a recession.
Tesla (NASDAQ: TSLA) plans to have workers at the Shanghai plant work in a closed-loop system and be regularly tested for the coronavirus until mid-June. Tesla's Shanghai plant also plans to resume two-shift operation as early as next week so that car production can resume 24-hour operation. At the same time, Tesla began to build a new supercharging station in the Mojave Desert between Los Angeles and Las Vegas and plans to configure 100 charging piles, which may become the largest supercharging station in the world.
NIO (NYSE: NIO) Hong Kong stocks were included in the Hang Seng Technology Index and the Hang Seng Composite Index. NIO officially became the first auto company in the world to complete the listing in three places. It is reported that NIO was officially listed on the main board of the Singapore Stock Exchange on May 20 with the stock code “NIO”.
With the opening of the third data center in Germany, Alibaba (NYSE: BABA) Cloud announced the official opening of its cloud data center in Thailand, providing cloud computing services for Chinese enterprises going overseas, enterprises developing in Thailand and local users.
Netflix (NASDAQ: NFLX) announced a new round of investment in South Korea. On the same day, the Ministry of Trade, Industry and Energy of Korea announced that Netflix's special effects company Scanline VFX will invest US$100 million in South Korea to build a special effects production company by 2027.
Bitcoin is trading at its lowest level since July 2021, still less than half of its all-time high of nearly $69,000 set in November. By contrast, the S&P 500 closed Thursday at its lowest level since March 2021.
The leading digital asset's slow recovery from the recent crash has been largely related to spillovers from the stock market sell-off, driven by the collapse of the dollar-pegged systemically important stablecoin.
“It seems that all the effects of the stablecoin drama that led to the precipitous fall in cryptocurrencies are finally fading,” Moya wrote.
Stablecoin TerraUSDUSTUSD –9.18% continues to trade at a steep discount of 7 cents to the U.S dollar. Luna, a related token designed to keep Terra pegged through an arbitrage market mechanism, changed hands at a fraction of a penny. It was $80 two weeks ago when it was one of the largest digital assets.
Andrew Kang, the chief financial officer of MicroStrategy, the world's largest listed company holding bitcoin, said in an interview with the media on Wednesday that despite the collective decline in the crypto market and the stock market, the company's long-term strategy to buy and hold bitcoin will not change.
Previously, MicroStrategy CEO Michael Saylor has been emphasizing that the company will not sell its bitcoin holdings.
Spot gold rose slightly on Friday to close at $1,845.46 an ounce, up 1.86% this week, recording its first weekly gain in five, as concerns over economic growth persisted and the dollar fell this week.
Safe-haven gold was supported by a slide in U.S Treasury yields, which fell for a third straight session as investors remained concerned about growing signs of an economic slowdown.
Chief market strategist at Blue Line Futures, said the dollar's pullback this week helped gold rise. In addition, as soon as the price of gold fell below the $1785 mark, bargain hunters entered the market, which provided moderate support.
Weak economic data, including a larger than expected number of U.S initial jobless claims, underscored risks to growth as the Federal Reserve embarks on its most aggressive rate hike cycle in decades. Fears of a potential recession have investors flocking to gold-backed ETFs. ETF holdings recovered on Thursday from their lowest level since March, according to preliminary data compiled by Bloomberg.
Commodity strategist Ryan McKay and others said in the report that weak economic data has brought much-needed support to precious metal prices, however, they said that a sustained rebound in gold prices may face a relatively high threshold, downtrend and all precious metals The prevailing negative sentiment remains unbreakable.
Oil prices closed slightly higher on Friday, with U.S crude up 0.42% at $110.36 a barrel, as the European Union plans to impose an oil embargo on Russia, and some regions ease the lockdown of the new crown epidemic. The refined oil market remains tense, easing the slowdown in economic growth. The slowdown will affect demand concerns.
Rising demand for auto fuel and falling inventories ahead of the summer driving season underscores tight supply fundamentals, even as broader economic concerns rattled stocks. Rebecca Babin, senior energy trader said “there is still a disconnect between the risky financial markets related to crude oil financial assets and the physical market trying to digest the release of strategic oil reserves to meet demand, which has left the market fragmented and volatile.”
Craig Erlam, senior market analyst said risks remain skewed to the upside, given the reopening of some regions and continued efforts by the European Union to impose an oil embargo on Russia.
In the U.S, energy companies added oil and gas rigs for a ninth straight week this week, as most small producers grappled with high oil prices and boosted output amid a government push, according to Baker Hughes statistics.
The dollar index was last up 0.16% at 103.04, while the 10-year Treasury yield fell 5 basis points to 2.783%. However, the dollar index was still down 1.4% for the week on concerns that the dollar's months long rally may have been overdone. The Swiss franc posted a weekly gain of 2.75% against the dollar, its biggest weekly gain in more than two years, while the yen posted a weekly gain of more than 1% against the dollar.
JPMorgan strategist Meera Chandan and others wrote in a research slowing U.S growth momentum would not challenge our bullish stance on the dollar relative to high-beta currencies but a stronger case, saying whether the dollar should continue to run Winning against other reserve currencies remains an issue.
The greenback has been supported by investors seeking safety in recent months as markets tumbled across markets amid fears of soaring inflation, a hawkish Federal Reserve and the fallout from the Russia-Ukraine conflict. That rally came to an abrupt end this week. However, heightened volatility in global financial markets and the dollar's rise to highs in recent months prompted investors to turn to safe-haven currencies such as the yen and Swiss franc.
Jonas Goltermann of Capital Economics said in a note that it is time for the dollar to take a breather after its recent surge.
The dollar pared gains against the yen, up 0.1 percent to 127.92, with Yoshio Sakakihara, a professor at Aoyama Gakuin University in Japan, saying the yen will trade between 140 and 150 by the end of this year.
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