US stocks opened on the territory of the bear market on Monday, dropping 20% from their January peak. This shows a growing pessimistic view of the economic outlook.
Markets around the world plummeted as higher-than-expected inflation and lower-than-expected economic growth overturned interest rate and corporate earnings outlook. Stocks in Asia and Europe fell, investors dumped government bonds, oil prices fell, and cryptocurrencies crashed.
The S & P 500 fell 2.5% at the start of trading as the wave of selling continued. The S & P 500 closed shortly above the bear market territory after a temporary fall last month. The market has been volatile since then, and last week’s S & P 500 recorded the worst weekly losses since January.
ING analysts wrote in a note to investors Monday morning that the U.S. benchmark index was “within a day of bad bear market moves and stock futures haven’t yet expressed any negative sentiment. It suggests that. ” The S & P 500 has fallen in 9 of the last 10 weeks.
Friday’s report shook the US inflation surge as investors worried that the Federal Reserve might have to raise interest rates higher and faster than expected to curb price increases. Shown, this could hurt the US economy.
Due to high inflation in many countries, investors around the world have sold stocks, bonds and other assets. The supply chain is still stagnant and economic growth forecasts have been downgraded.
The Asian stock market closed in the red as Japan’s benchmark Nikkei 225 index fell 3% and South Korea’s Kospi plunged 3.5%. In Hong Kong, stocks fell 3.4%, while the index of China’s largest listed company in Hong Kong fell 3.6%. The Japanese yen has fallen against the US dollar to its lowest level in 24 years.
Fear in the area increased on Monday after Beijing and Shanghai officials re-imposed social distance measures after another massive test over the weekend. China’s economic growth has been hit by the country’s “zero-covid” pandemic policy, which somehow left most of the country blocked for the first few months of this year.
In Europe, the Stoxx 600 index fell 2.2% to its lowest level since early 2021. The UK’s FTSE 100 fell 1.7% in response to news about the country’s economy. Surprisingly shrunk in April, Down 0.3% from March. Economists expected a slight increase in growth.
European bond prices fell sharply as traders priced at a range of interest rates rose in response to high inflation across the euro area by the European Central Bank. Yields on German and Italian government bonds, which are inversely proportional to prices, hit highs for the first time in years, suggesting that borrowing costs have skyrocketed.
Cryptocurrencies, which some believe can act as shelters during periods of inflation and turmoil, have also been hit hard. Bitcoin, the largest cryptocurrency, has fallen to a low of below $ 24,000 in 18 months. So far this year we have lost about half of its value.According to the company, the value of all cryptocurrencies fell below $ 1 trillion for the first time since early 2021. CoinmarketcapDecreased about $ 2 trillion from the peak.
