According to reports, investors are worried about the Federal Reserve rate hikes coming up and China's Covid-19 epidemic. On Monday, equities fell below the $2 trillion mark as the crypto economy and gold prices plunged 1.6% against the U.S. Dollar during the last 24 hours. After Elon Musk announced that he had acquired Twitter at 2:50 (ET), both the equities as well as the crypto markets recovered tremendously.
Global Markets Fear Covid-19-related Supply Chain Issues, and the Possibility for Aggressive Rate Hikes
Jerome Powell, the U.S. Federal Reserve Chair, explained on April 21st, that the U.S. central banks may need to act "faster" in order to increase bank rates. Powell also noted that the U.S. central banks could increase the rate by 50 basis points at their next Fed meeting. Investors were scared by Powell's hawkish remarks and U.S. stockindices suffered losses before last week's weekend.
Wall Street suffered further Monday as the Dow Jones Industrial Average and NYSE Composite both saw losses. The Dow lost 415.23 points at 10 AM ET. It recovered just over half of its losses by afternoon. The Federal Reserve's rate hikes and China's Covid-19 lockdowns are currently the main culprits. Christopher Grisanti (chief equity strategist at MAI Capital Management), stated that China's current lockdowns have created fear about possible supply chain issues.
China lockdowns are worsening. Grisanti stated that it slows down general economic growth as well as creating supply chain problems that will continue to make inflation poor and lower earnings growth in America. "I don’t believe we’ve reached the bottom yet. The strategist said that we have not yet seen a big sell-off where we have large volumes.
Portfolio Manager: Gold and Crypto Markets are in Trouble, but he says 'Markets are Struggling'
In recent times, cryptocurrencies and gold have seen a decline in value. Over the past week, the crypto economy lost billions and fell below $2 trillion. Many of the top ten crypto assets suffered losses of between 2-10% over the past seven days. In addition, one ounce fine gold lost some percentage in the last 24 hours.
Fine gold has seen its value drop by 1.6% over the past day. Silver has experienced a decline of 2.04%. The gold prices have remained stagnant for the past 30 days. One-month statistics show that an ounce of fine gold's USD value has increased by just 0.39%. Silver dropped by more than 3% in the past 30 days. The decline in precious metals' value is also being attributed to China's Covid-19 epidemic and current U.S. Treasury yields may be driving gold investors away.
Marketwatch was interviewed by Steven Violin, portfolio manager at F.L.Putnam Investment Management Co. on April 23. Violin stated that investors are facing "very strong forces" and that no one can predict the future. Violin stated that the "extraordinary economic momentum" from the recovery from pandemic has been met by a rapid shift in monetary policies. "Markets are struggling to understand, as we are all, how that's going down." "I don't think anyone knows the answer."
U.S. Equities and Cryptocurrencies Recover from Day's Losses after Musk Purchases Twitter
Despite the recent stock market decline and losses in the crypto economy, both equities as well as crypto prices have rebounded since Twitter announced the purchase of Twitter by Elon Musk from Tesla. After the announcement, the entire crypto economy increased from $1.93 trillion in value to $1.96 trillion. After falling below the $40K mark BTC has once more risen above the $40K area.
Major U.S. stockindices recovered from morning losses. NYSE, S&P 500 and Nasdaq also erased most of the day's losses. The major Wall Street indexes changed from being red to green as the trading day neared its close bell. Parag Agrawal, Twitter's current CEO, stated that the company was bought by Musk. He also said that Twitter has a purpose and relevance which impacts the whole world. "We are deeply proud of our team and inspirated by the work that has never seemed more important." This is what stock investors and crypto market participants seem to like about the Musk purchase of the social media company.