Month: June 2022

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

Investors believe a mild recession starting in the last months of 2022 is now more likely than not, given the rapidly slowing growth momentum, the monetary tightening, the energy and food price pressure, and the escalating geopolitical tensions.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

On Wednesday, June 15, the U.S. Federal Reserve announced a 75-basis point interest rate hike, its largest since 1994, to curb inflation which was running at a rate of 8,6% in May.

Investors believe a mild recession starting in the last months of 2022 is now more likely than not, given the rapidly slowing growth momentum, the monetary tightening, the energy and food price pressure, and the escalating geopolitical tensions.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

The economic-sensitive assets have been retreating from their recent all-time highs as long as talks of a recession have been accelerating during the recent weeks. The central banks will continue their aggressive path of monetary policy tightening to fight unstoppable inflation with whatever rate hikes were needed.

On Wednesday, June 15, the U.S. Federal Reserve announced a 75-basis point interest rate hike, its largest since 1994, to curb inflation which was running at a rate of 8,6% in May.

Investors believe a mild recession starting in the last months of 2022 is now more likely than not, given the rapidly slowing growth momentum, the monetary tightening, the energy and food price pressure, and the escalating geopolitical tensions.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

Global markets have been under pressure lately following the growing concerns about slowing global economic growth due to the continued war in Ukraine, the Covid pandemic, supply chain disruptions, surging inflation, and the aggressive interest rate hikes from central banks to counter it.

The economic-sensitive assets have been retreating from their recent all-time highs as long as talks of a recession have been accelerating during the recent weeks. The central banks will continue their aggressive path of monetary policy tightening to fight unstoppable inflation with whatever rate hikes were needed.

On Wednesday, June 15, the U.S. Federal Reserve announced a 75-basis point interest rate hike, its largest since 1994, to curb inflation which was running at a rate of 8,6% in May.

Investors believe a mild recession starting in the last months of 2022 is now more likely than not, given the rapidly slowing growth momentum, the monetary tightening, the energy and food price pressure, and the escalating geopolitical tensions.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

Global markets have been under pressure lately following the growing concerns about slowing global economic growth due to the continued war in Ukraine, the Covid pandemic, supply chain disruptions, surging inflation, and the aggressive interest rate hikes from central banks to counter it.

The economic-sensitive assets have been retreating from their recent all-time highs as long as talks of a recession have been accelerating during the recent weeks. The central banks will continue their aggressive path of monetary policy tightening to fight unstoppable inflation with whatever rate hikes were needed.

On Wednesday, June 15, the U.S. Federal Reserve announced a 75-basis point interest rate hike, its largest since 1994, to curb inflation which was running at a rate of 8,6% in May.

Investors believe a mild recession starting in the last months of 2022 is now more likely than not, given the rapidly slowing growth momentum, the monetary tightening, the energy and food price pressure, and the escalating geopolitical tensions.

Market reaction:

Investors moved away from risky assets last week towards havens of the U.S dollar, bonds, and gold, with S&P 500 index losing nearly 6%, it’s worst week since 2020, to trade 24% below its January 2022 high and deep into a bear market.

S&P 500 index, Weekly chart

The Dow Jones index finished the week with almost 5% losses and settling below the 30,000 key level or down 17% from its record highs, while the tech-heavy Nasdaq Composite also slipped 4,8% or more than 35% from its all-time highs following the ongoing sell-off in the yield and growth-sensitive tech companies.

Meanwhile, the Crypto market has been the biggest loser among the risky sectors, since it has lost over $2t in value from its record highs amid the risk aversion sentiment in the market.

Bitcoin, the larger digital coin is down over 70% from its all-time high of $69,000 in November 2021, after having fallen to as low as $18,000 during the weekend, while the second-largest coin, Ethereum touched the $880 level before bouncing above $1000 on Monday morning.

Crude oil’s correction:

Crude oil prices closed in deep red on Friday, losing nearly 9% last week, their first weekly decline since last month. Brent crude lost 7% on Friday, falling to as low as $112/b before bouncing to near $114/b on Monday morning, while the WTI also tumbled 9% to $108/b before recovering above $110/b.

Brent crude oil, 2-hour chart

Energy traders took some profits out of the crude oil market last week on concerns that the skyrocketing oil prices will add more pressure on global economies which would ultimately reduce demand for petroleum products.

The recession-driven fuel demand worries come to offset concerns about tight supplies, a Russian oil embargo, and record-low inventories which have been supporting the oil prices to climb to multi-year highs recently or up nearly 45% in 2022.

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

Market sell-off:

The stock markets hit hard yesterday, with the S&P 500 slumping 3.9% to 3,749, marking its lowest level since March 2021 and dropping into a bear market territory since it lost more than 20% from its January 2022 record. The index closed in bear market territory (down more than 20% from its high) for the first time since March 2020 at the beginning of the Covid pandemic.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

Economists concerned that the higher interest rates, the surging inflation, the elevated energy prices, and the falling consumer confidence could slip global economies into recession, forcing investors to dump risky assets such as growth-led tech stocks, travel stocks, and cryptocurrencies and jump into havens such as U.S. dollar, gold, inflation-hedged commodities, and companies that pay consistent dividends.

Market sell-off:

The stock markets hit hard yesterday, with the S&P 500 slumping 3.9% to 3,749, marking its lowest level since March 2021 and dropping into a bear market territory since it lost more than 20% from its January 2022 record. The index closed in bear market territory (down more than 20% from its high) for the first time since March 2020 at the beginning of the Covid pandemic.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

Global financial markets experienced a ferocious sell-off on Monday with the S&P 500 index dropping into a bear market territory for the first time since March 2020 on recession fears and as investors are beginning to anticipate an even faster pace of interest rate hikes by central banks to curb the 40-year high inflation.

Economists concerned that the higher interest rates, the surging inflation, the elevated energy prices, and the falling consumer confidence could slip global economies into recession, forcing investors to dump risky assets such as growth-led tech stocks, travel stocks, and cryptocurrencies and jump into havens such as U.S. dollar, gold, inflation-hedged commodities, and companies that pay consistent dividends.

Market sell-off:

The stock markets hit hard yesterday, with the S&P 500 slumping 3.9% to 3,749, marking its lowest level since March 2021 and dropping into a bear market territory since it lost more than 20% from its January 2022 record. The index closed in bear market territory (down more than 20% from its high) for the first time since March 2020 at the beginning of the Covid pandemic.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.

Global financial markets experienced a ferocious sell-off on Monday with the S&P 500 index dropping into a bear market territory for the first time since March 2020 on recession fears and as investors are beginning to anticipate an even faster pace of interest rate hikes by central banks to curb the 40-year high inflation.

Economists concerned that the higher interest rates, the surging inflation, the elevated energy prices, and the falling consumer confidence could slip global economies into recession, forcing investors to dump risky assets such as growth-led tech stocks, travel stocks, and cryptocurrencies and jump into havens such as U.S. dollar, gold, inflation-hedged commodities, and companies that pay consistent dividends.

Market sell-off:

The stock markets hit hard yesterday, with the S&P 500 slumping 3.9% to 3,749, marking its lowest level since March 2021 and dropping into a bear market territory since it lost more than 20% from its January 2022 record. The index closed in bear market territory (down more than 20% from its high) for the first time since March 2020 at the beginning of the Covid pandemic.

S&P 500 index, Weekly chart

Hence, the tech-heavy Nasdaq Composite dropped nearly 4.7% on Monday, or more than 33% off its November 2021 record following an ongoing meltdown in yield-sensitive and growth-led tech companies, while the industrial Dow Jones tumbled 2.8%, which is roughly 17% off its record high.

On top of that, the market meltdown intensified in the last hour of the session last night after CNBC’s Steve Liesman confirmed that the Federal Reserve would consider a 75-basis-point increase on Wednesday, which is greater than the 50-basis-point hike currently expected.

At a time, stocks were sold off on Monday, the 10-year yield posted its largest one-day move since March 2020 to above 3,40%, the safe-haven DXY-dollar index surpassed 105 level, pressuring risk-sensitives Euro briefly below $1,04, and Pound Sterling to near $1,21 mark.

However, the biggest losses were seen in the cryptocurrency sector where Bitcoin fell to as much as 17% to $21,000, Ethereum dropped to near $1,150, Solana to below $30 following the risk-aversion sentiment.

Hawkish Federal Reserve:

Following last Friday’s U.S. Consumer Price Index report which showed that the inflation was running hotter-than-expected in May at an 8,6% pace vs 8,3% in April, investors are bracing themselves for the possibility of a larger-than-expected interest rate hike from Federal Reserve this week since the inflation is running well ahead of the Fed’s 2% target.

Inflation has been rising to fresh record highs around the world since last year, mainly driven by a record jump in energy and food prices on the backdrop of the Ukraine war, the Covid-led supply chains disruptions, and the demand-supply imbalance across the commodities ecosystem.

Investors see a more than 90% chance of a 75-bps rate hike at this week’s two-day Federal Reserve that concludes Wednesday, while the Wall Street firm’s economists foresee another 75-bps hike in July, followed by a 50-bps move in September and 25-bps moves in November and December, taking the fed funds rate to a range of 3.25%-3.5% by the end of the year.