Today is one of those days you should not log in to your retirement accounts. US stocks are facing relentless selling pressure as investors slash earnings outlook given unclear outlooks for economic growth and the US consumer. Today’s PPI report did little to change the outlook with inflation, which suggests pricing pressures remain uncomfortably high. Apple shares fell into bear market territory on worries that future earnings growth will remain in jeopardy given inflationary pressures are not decelerating sharply.
If you plan on taking advantage of some of these discounts, be warned that we haven’t seen capitulation just yet. Some traders on Wall Street believe that a stock market bottom is nearing, but confidence in that call is not really high. Persistent inflation, uncertainty with commodity prices impacted by the war in Ukraine, and China’s COVID situation are all short-term risks that could lead to aggressive tightening by the Fed later in the year, which is preventing some investors from taking advantage of the massive discounts across the stock market.
Where do I begin? Stablecoin chaos and lost confidence with cryptos has now been followed by a rebound. Tether, a true stablecoin that is backed by assets, saw its 1 dollar peg to the dollar broken as contagion spilled over from the TerraUSD, the algorithmic stablecoin collapsed.
Bitcoin has been a casualty of the broader market selloff of risky assets, but the latest crisis with stablecoins triggered the collapse of the USD 30,000 level, which was a key entry point for many institutional investors. Confidence has been waning in the cryptoverse but it seems we are getting close to the end of the market sell-off.
Bitcoin has rebounded from USD 25,424, but this won’t last if risk appetite does not stabilize soon. Bitcoin is still vulnerable to one last plunge that could coincide with a stock market selloff, before many crypto investors feel the bottom is in place.
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