The newest Fed officials’ statement intensified the hawkish signal of early rate hike released by the Fed’s meeting this week, and short-term U.S. bond yields climbed significantly. Although some technology stocks such as Tesla continue to rise, but finance, materials, energy such value stocks led the pressure on the broader market, the main U.S. stock indexes fell across the board, the Dow and the S&P are the largest one-day decline in a month, the week respectively, the largest cumulative decline in more than seven months and more than three months. Among Chinese stocks, some education stocks such as Good Future, which experienced a plunge, rebounded greatly on Friday.
St. Louis Fed President Bullard said Friday that he estimates the Fed may start raising interest rates in 2022, late next year, as inflation is moving up faster than previously expected. This expected time is earlier than most Fed officials expected to raise interest rates in 2023, as shown by the dot plot released on Wednesday. After Brad’s speech, the 2-year U.S. bond yields sensitive to recent rate hikes rose 7 basis points during the day, hitting a new one-year high. Long-term U.S. bond yields moved further downward. The dollar continued to rise, and continued to rise after the Fed meeting.
Cryptocurrencies continued to fall across the board under the pressure of a higher dollar. Among commodities, precious metals such as gold and base metals such as copper mostly continued to fall, but crude oil rallied, with commentary saying that while the prospect of a possible early Fed rate hike certainly weighed on the market, in the short term, it could not change the reality of a significant tightening of global oil inventories in the coming weeks. Gold, silver and copper fell between 7% and 8% cumulatively throughout the week, while crude oil only plunged on Thursday, retaining a cumulative gain of about 1% for the week.
In European markets, European stocks plunged led by banks, oil and gas and mining stocks, with multiple stock indexes posting their biggest one-day losses in at least five weeks. Pan-European stock indexes hit their biggest weekly decline in more than three months due to the drag of the sector led by mining stocks. European bonds were mixed, with bonds of peripheral countries continuing to climb and yields falling back after German and British bonds, but all accumulated gains throughout the week.
Dow and S&P both hit their biggest losses in five weeks Energy and finance sectors continue to lead declines Tesla bucked the market by gaining 1% alone leading technology stocks Good Future and other parts of the Chinese education stocks rallied big
The three major U.S. stock indexes opened lower collectively and stayed down throughout the day, ending with new daily lows. The Dow Jones Industrial Average once fell more than 550 points, down more than 1.6%, the S&P 500 Index once fell nearly 1.4%, the Nasdaq Composite Index fell by the maximum 1% during the day.
Finally, the three major indices collectively closed lower for the third day this week. The Dow fell for five days in a row, closing down 533.37 points, or 1.58%, at 33,290.08 points, a new closing low since April 1, the first time since May 12 closed down more than 500 points, the longest continuous decline since January 27 this year. The S&P 500 fell for a fourth straight day, closing down 1.31% at 4166.45 points, the biggest drop since May 12 and a new low since May 21. The Nasdaq closed down 0.92% at 14030.38 points, a new low since June 10, giving back all of Thursday’s gains.
Small-cap stocks continued to underperform the broader market, with the value-cap-heavy Russell 2000 closing down 2.17% at 2237.75 points, a new low since May 25. The tech-heavy Nasdaq 100 index closed down 0.1% at 14,049.58 points.
The Dow, S&P and Russell 2000 all fell below their 50-day averages.
This week, the Dow fell 3.45%, the largest decline since October 30 last year week, two weeks in a row, the S&P fell 1.9%, the Nasdaq fell 0.28%, respectively, ending three weeks and four weeks in a row, the S&P hit the biggest single-week decline since February 26 week; Russell 2000 fell 4.2%, ending a three-week streak, while the Nasdaq 100 rose 0.27%, up five weeks.
Dow components, Walgreens, Chevron, Goldman Sachs fell more than 3%, JPMorgan Chase, American Express, Dow Chemical, Intel fell more than 2%. The S&P 500’s 11 major sectors, only three closed up on Friday, led by the information technology sector, which rose more than 1%, health care and utilities rose nearly 0.8% and 0.5%, respectively. Declining sectors, down nearly 3% in energy and down more than 2.4% in finance continue to lead the decline, materials fell more than 2% decline, in addition to a decline of nearly 0.5% in non-essential consumer goods, other sectors are down more than 1%.
After the Federal Reserve meeting on Wednesday, stock market funds from value stocks back to growth stocks, the former continued to fall, the latter shocked upward, the gap between the two categories of stocks widened.
Most of the leading technology stocks that rose at least more than 1% on Thursday mostly retreated, but Tesla bucked the market to close up nearly 1.1%. FAANMG six major technology stocks, only up nearly 0.5% Nifty closed up, Facebook fell 2%, Google parent company Alphabet fell more than 1.3%, Apple fell 1%, Microsoft fell nearly 0.6%, and Amazon closed slightly lower.
Along with the sharp flattening of the U.S. bond yield curve, bank stocks fell en masse, with most of the big banks down at least more than 2% and Morgan Stanley down more than 4%; Citi fell 1.8% with the smallest relative decline, but has fallen for twelve consecutive days, the longest losing streak in 2018.
Gold stocks were down in general, with gold mining stocks ETFs down more than 2%. Among new energy auto stocks, Xiaopeng rose more than 2%, while Nikola fell nearly 3%, Ideal Auto dropped more than 2% and Azera dropped 0.9%.
Among other Chinese stocks, some education stocks rebounded, with Good Future, which plunged nearly 14% on Thursday, closing up more than 8%, NetEase Youdao, which fell more than 9% on Thursday, up 5%, and Gao Tou, which fell more than 8% on Thursday, up more than 3%, but New Oriental, which fell more than 8% on Thursday, failed to reverse its decline, closing down nearly 0.5%. Beeper rose more than 3%.
In Europe, the Euro Stoxx 600 index hit its biggest closing loss since May 11 and hit a new low since June 3. The sectors, down nearly 3% in banks and down 2.9% in oil and gas led the decline, down nearly 2.7% in mining stocks in the sector of basic resources and down more than 2.6% in technology fell. Among the national stock indexes, Germany, France and the United Kingdom stocks are the largest one-day decline since May 11, Italian stocks and Western stocks together the largest one-day decline since April 20.
This week, the Stock Exchange 600 fell 1.19%, the largest one-week decline since the week of February 26. The basic resources sector fell nearly 8%, the largest decline among all sectors. All national stock indices also accumulated losses, with German stocks falling for the first time in the last six weeks.
2-year U.S. bond yields hit a one-year high for the week, up 11 basis points, the largest increase in a year and a half 30-year yields hit a four-month low for the week, down 12 basis points, the largest decline in six months
After Bullard’s speech, short-term U.S. bond yields climbed significantly, U.S. stocks less than 0.24% 2-year U.S. bond yields rose above 0.27% at the beginning of the day, once breaking 0.28% during the day, up more than 7 basis points from the intraday low of 0.21% below, for the third consecutive day to hit a one-year intraday high, for the first time since April last year, located above the Federal Reserve’s target range for the federal funds rate.
And the U.S. 10-year benchmark Treasury yield in the U.S. stocks before the bell had a short re-up 1.51%, since then continued downward, the U.S. stocks fell to 1.44% below midday, approaching the intraday trough since early March set by last Friday’s drop below 1.43%, an intraday drop of more than 7 basis points, the U.S. stocks closed at 1.45% below, an intraday drop of more than 6 basis points.
Following Thursday’s intraday drop of 16 basis points, the 30-year U.S. bond yield approached 2.00% at lunchtime on Friday, refreshing the four-month low set on Thursday and dropping about 10 basis points intraday.
By late Friday in New York, the 10-year U.S. bond yield was down 6.6 basis points, the 30-year yield was down 8 basis points and the 2-year yield rose nearly 4.5 basis points. This week, the 10-year U.S. bond yields fell by more than 1 basis point, the 30-year fell by more than 12 basis points, the largest single-week decline since December last year.
And the 2-year U.S. bond yield rose 10.7 basis points for the week, the largest one-week increase since November 2019.
The 30-year and 5-year U.S. bond spread narrowed 7.610 basis points to 113.481 basis points on Friday, after dropping 26.11 basis points for the week. 5-year and 30-year yield curves fell the most in a single week this week since September 2011.
European Treasuries were mixed on Friday, with British and German debt prices rebounding and yields falling back, while yields on Italian, Greek and Spanish Treasuries from peripheral countries continued to climb. British 10-year benchmark Treasury yields fell 2.3 basis points during the day to 0.752%; German bund yields fell 0.5 basis points during the same period to -0.200%. Italian and German government bonds hit the largest interest rate differential since January.
British bond yields rose by more than 4 basis points this week, and German bond yields rose by more than 7 basis points, reversing a four-week losing streak.
The dollar index hit a two-month high in a row Bitcoin fell below $36,000 Ether fell 10% at one point Dogcoin fell more than 10% this week
After breaking 92.00 for the first time in two months, the ICE Dollar Index (DXY), which tracks the exchange rate of a basket of six major U.S. dollar currencies, moved further higher on Friday, with U.S. stocks rising above 92.40 at one point in early trading, up 0.56% on the day, hitting a new intraday high for the second consecutive day since early April.
By the close of U.S. stocks on Friday, the dollar index was above 92.20, up about 0.4% intraday, up more than 1.9% this week; Bloomberg Dollar Spot Index rose 0.6%, up six days in a row, the longest streak of two consecutive days since March 23 last year, the biggest weekly gain this week since April last year.
At 5:59 p.m. Beijing time on the 19th, the offshore yuan (CNH) was at 6.4616 yuan against the U.S. dollar, down six days in a row, hitting a new low since the end of New York on May 6, down 45 points from the end of New York on Thursday, and had fallen to 6.4653 yuan during the day, hitting a new intraday low since May 7, down 650 points for the week, down three weeks in a row.
Bitcoin (BTC) had fallen below $35,200 in U.S. midday trading, hitting a new low since last Sunday, June 13, down more than $3,000 from its intraday high in early Asian trading, a percentage drop of about 8%, and was below $35,500 at the close of U.S. trading, down more than 5% in the last 24 hours.
Ether (ETH), the second-largest cryptocurrency by market capitalization after Bitcoin, fell below $2,140 in U.S. midday trading, hitting a new intraday low since May 24, down about 10% from its intraday high, and closed below $2,200 in the U.S., down about 7% in 24 hours.
CoinMarketCap data shows that mainstream cryptocurrencies fell across the board for a third consecutive day on Friday, with Dogcoin (DOGE), Bitcoin Cash (BCH) and Litecoin (LTC), the sixth, 11th and 12th largest cryptocurrencies by market capitalization, all down more than 6% in the last 24 hours, while Ripple (XRP), the seventh largest cryptocurrency, fell more than 5%, and Cardano (ADA), the fifth and fourth largest Cardano (ADA) and BNB (BNB) are down nearly 5%.
Most of the mainstream cryptocurrencies are down for the week, with DOGE down over 11.1%, ETH down over 9.6%, XRP down over 8.2%, BNB down 6.6%, LTC down nearly 6.5%, BCH down over 5.8%, BTC down over 4.9% and ADA down over 4.7% in the last seven days.
Gold hit a two-month low a week down 6% the largest weekly decline in 13 months this week, silver fell nearly 8%, palladium fell 11%
New York gold futures fell for two days in a row, but the decline eased significantly from Thursday. comex August gold futures closed down 0.3% at $1769.00 per ounce, hitting a new low for the main contract closing since April 15 this year, and closed at a new low since April 30 on Thursday.
This week, gold fell for the third consecutive week, a cumulative decline of about 5.9%, the largest single-week decline since the week ended March 13 last year. This mainly stems from Thursday’s close of nearly 4.7%, close to the biggest drop since April 15, 2013.
Silver futures rebounded in New York, with COMEX July silver futures closing up 0.4%, approaching $26 per ounce, coming off a low hit on Thursday since April 20, but down a cumulative 7.7% for the week, with a 7% drop on Thursday alone.
Platinum fell for four days in a row, closing down nearly 1.4% on Friday, down about 9.6% for the week, down three weeks in a row. Palladium fell for two days in a row, closing down 1.7% on Friday and down about 11% for the week, down two weeks in a row, closing down 11% on Thursday.
London-copper hit another two-month low this week, down more than 8% London-tin fell below $30,000 to hit a three-week low, ending a four-week streak of gains
London base metals futures continued to fall on Friday, except for the rebounding LEN lead, which came out of a seven-week low. Copper, aluminum and zinc fell for a second day. Copper hit another two-month low, closing below $9,200 for the first time since April 14. Aluminum and zinc hit new lows in more than three weeks and nearly eight weeks, respectively. Lunnickel and tin fell for four days in a row, with nickel hitting a three-week low for four days and tin hitting a three-week low, falling below $30,000 for the first time in two weeks.
This week’s cumulative decline in all base metals, copper, aluminum, zinc, lead and nickel to give back all of last week’s losses, copper fell nearly 8.6%, the top decline, followed by a drop of more than 7% of zinc. Tin ended a four-week streak of gains, and nickel fell by more than 5%. New York copper futures also continued to fall, Comex July copper futures closed down 0.5% at $4.16/lb, down more than 8% for the week, the largest weekly decline since March last year.
Crude oil rebounded, still up 1% for the week after the biggest drop in four weeks on Thursday, up four weeks in a row
International crude oil futures rebounded Friday after hitting their biggest closing drop since May 20 on Thursday, with U.S. oil and Brewers closing up for the third and fourth days of the week, respectively, nearing highs in more than two years.
U.S. WTI July crude futures closed up 0.84 percent at $71.64 per barrel. Brent August crude futures closed up 0.59% at $73.51/barrel, both erasing some of Thursday’s losses, after U.S. oil closed at a new high for two consecutive days since Oct. 10, 2018, and Brent oil closed at a new high for four consecutive days since April 2019, before closing down more than 1% on Thursday.
This week, U.S. oil cumulative rise of about 1%, about 1.1% rise in the cloth oil, up four weeks in a row, the seventh week in the last eight weeks cumulative rise, for two consecutive weeks at least a week up 1%, but the rise is significantly less than last week, last week, U.S. oil and cloth oil cumulative rise of 4.97% and 4.6%, respectively.
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