Market volatility remains elevated as investors are still feeling jittery over a very tense Ukraine-Russia situation, a whole range of inflationary issues that include a potentially aggressive Fed and a global chip problem that just won’t get any better. Optimism remains that a massive correction is still unlikely to happen because the US growth story will likely remain intact this year, but Wall Street is not seeing many buyers emerge ahead of the Fed and as the conflict in Ukraine escalates. Earnings season temporarily has fallen to the backburner as mixed results and hesitancy to provide any upbeat outlooks will remain the case as supply chain issues seem poised to extend beyond the summer.
After lunch, Wall Street was staring at these discounts and said they are too good to pass up. The geopolitical risks to the outlook are going to remain elevated going forward, but pricing in an overly aggressive Fed may have been overdone. Money managers are thinking I can start buying the S&P 500 at 12% now and if the Fed kills this bull market I can average in probably ahead of 4,100.
US consumer confidence softened in January as the omicron impact weighed on the American economic outlook. The headline confidence reading fell from 115.8 to 113.8, better than the expected 111.2 forecast. The present situation improved while the expectations component fell 4.6 points as income expectations decelerated.
Is the crypto bloodbath over?
After a few days of steadying around the USD 35,000 level, bitcoin traders are growing confident that the bloodbath may be over. It has been tough to have diamond hands, but many social media influencers remain committed long-term to bitcoin despite the over 50% plunge. Today’s price action was very promising for many crypto traders as equities were sold heavily and many emerging market currencies appear poised to have heightened volatility this year.
Bitcoin managed to trade in the green despite some negative headlines: The IMF reiterated that El Salvador using bitcoin as a tender entails a large risk and Kazakhstan will keep the power off for bitcoin miners for the rest of the month. Altcoins are also rallying as optimism is brewing after this broad market selloff for risky assets is over, it could be a strong altcoin season. If bitcoin can manage to claw its way back to USD 40,000 over the next several trading days, that would be a very positive sign for the cryptoverse.
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