US stocks were unable to hold onto earlier gains as restrictive policy and recession fears remained front and center for investors. Discount buying triggered another bear market rebound that didn’t last long at all. It is too early to start betting on a Fed pivot this year and that should make this a difficult environment for stocks.
China’s reopening and bets that PBOC will cut rates in the first half of the year should help keep Chinese stocks supported. After a couple of bad years, Wall Street is wondering if Chinese stocks could outperform if their Covid reopening continues without any major disruptions. China still has to deal with a struggling property market, but hopefully, it will show signs of improving on more support measures.
Demand woes are killing Tesla shares. The fourth quarter update was very disappointing as they are struggling to deliver cars. Tesla is battling rising competition, a weakening consumer, and lower gas prices. Tesla might be a long-term hold for many investors, but right now it seems the path of least resistance is lower for Tesla’s stock price.
Happy Birthday, Bitcoin! It should come as no surprise that this teenager of an asset class has constant mood swings. Much attention is going to Sam Bankman-Fried’s day in court which is expected to have him plead not guilty to an eight-count fraud and conspiracy indictment.
This is still a difficult time for crypto as everyone waits to see which will be the next crypto company to fail. Regulation is taking its time but guidelines should start to take hold this year. A top US regulator delivered a joint warning on crypto activities, which did not contain any new risks.
Bitcoin appears anchored but it is still not clear when we will test and possibly make a new bottom.
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