Oh Snap, wrath of US data misses, stock selling resumes, bitcoin in danger

US stocks are quickly giving up yesterday’s gains after a wrath of US economic data signaled broad weakness across large parts of the economy. ​ Everything is weakening at a faster clip than anyone expected and that does not bode well for the US consumer and for short-term outlooks for equities. ​ The dollar is sliding as Treasury yields plunge as risk aversion returns following a gloomy outlook from snap and disappointing US PMI and housing data.

Snap slides

Snap shares plunged after the social media giant cut their forecast over concerns with a rising macro operating environment, including continued supply chain disruptions, rising input costs, economic concerns due to rising interest rates, and concerns related to geopolitical risks stemming from the war in Ukraine.

Snap’s downbeat outlook dragged all social media and advertising stocks lower as it appears to be clear that most companies will not avoid the troubling macro backdrop. 

Snap CFO Andersen noted that the “operating environment could be even more challenging going forward. More specifically, the headwinds that impacted our business in Q1 have persisted into Q2, and we believe the impact of the war on Ukraine has been significant, and this impact is particularly difficult to predict going forward.”

US Data ​

The flash PMI readings showed a sharper deceleration in economic activity as inflationary pressures linger. Manufacturing activity fell to a 3-month low and what surprised many was an even larger deterioration in service sector activity. ​ The playbook most traders were using was that manufacturing output would weaken, but that should benefit the service sector.  Service business activity fell from 55.6 to 53.5, a 4-month low. ​ It looks like inflationary pressures are having a worse impact on the US economy and that demand growth is sharply weakening.

The Richmond Fed Manufacturing Activity was abysmal. ​ The headline reading for the fifth district was negative and well below the most pessimistic forecast. Two of the three components of the index turned negative and the only positive note was that modest improvement was seen with supply chain issues.

The April new home sales report confirms that the peak of the housing market is in place. New residential sales fell 16.6% to 591,000 homes, much worse than the forecast range of 700,000-765,000. Housing prices continue to rise but that is clearly having an impact on demand.

The US economy is not falling apart, but the weakness it is experiencing is much worse than many expected.


Bitcoin is in the danger zone as sentiment for risky assets have fallen off a cliff. Normally, plunging Treasury yields makes crypto attractive but right now no one wants to buy this dip. ​ Bitcoin can’t stabilize until Wall Street sees calm and that might not happen for a little while longer. ​ Bitcoin remains vulnerable to another test of the USD 25,424 level as we might not see capitulation in the stock market for a while. The USD 20,000 level remains vital support for bitcoin and will probably attract a wave of long-term institutional bets. ​

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.