US stock market: U.S. shares tumbled yesterday, with the NASDAQ posting its steepest one-day route since September 2020, while European stocks extended losses for a third session as investors warily awaited U.S. tech earnings and fretted over global growth.
China's COVID-19 curbs and fears of aggressive U.S. Federal Reserve tightening continued to dampen risk appetite and lifted the dollar to new two-year highs. Oil prices rebounded in volatile trading and gold prices rose on safe-haven buying. There's a lot of anxiety ahead of the earnings which are coming up, today and tomorrow just because if they don't hold up, then there's nothing left to hold up the market.
Three-fourths of Beijing's 22 million people lined up for COVID-19 tests as the Chinese capital raced to stamp out a nascent outbreak and avert the city-wide lockdown that debilitated Shanghai for a month. There's a little bit of a growth scare coming in but in our view, there won't be an immediate slowdown in growth or inflation.
Dow Jones Industrial Average
The Dow Jones Industrial Average declined 2.38% to hit a new 1-month low. The biggest gainers of the session on the Dow Jones Industrial Average were Chevron Corp, which fell 0.61% or 0.96 points to trade at 156.53 at the close. Johnson & Johnson fell 0.72% or 1.33 points to end at 184.68 and Amgen Inc. was down 0.91% or 2.30 points to 249.87 in late trade. The biggest losers included Nike Inc., which lost 5.80% or 7.42 points to trade at 120.52 in late trade. Boeing Co declined 5.04% or 8.87 points to end at 167.04 and Visa Inc. Class A shed 4.22% or 8.85 points to 201.10.
NASDAQ 100
The NASDAQ index fell 3.95%. The top performers on the NASDAQ Composite were Evoke Pharma Inc. which rose 118.50% to 0.86, Nutex Health Inc. which was up 73.76% to settle at 7.68 and Cyngn Inc. which gained 52.07% to close at 3.68. The worst performers were Protagonist Therapeutics Inc. which was down 49.95% to 9.41 in late trade, Enjoy Technology Inc. which lost 29.95% to settle at 1.45 and LogicBio Therapeutics Inc. which was down 25.74% to 0.40 at the close.
Oil price - Crude Oil market, Brent Oil market
Oil was broadly steady today after Russia cut gas supplies to Bulgaria and Poland, although lingering concerns about Asian coronavirus lockdowns weighing on economic growth and oil demand kept a lid on prices. U.S. West Texas Intermediate crude futures gained 10 cents, or 0.1%, to $101.80 a barrel. Oil prices shrugged off the dollar rising to their highest in two years, making oil purchases more expensive for holders of other currencies.
Russian energy giant Gazprom said today it halted gas supplies to Bulgaria and Poland in a major escalation of Russia's broader row with the West over its actions in Ukraine, which Moscow calls a "military operation". The International Monetary Fund (IMF) warned yesterday that Asia faces a "stagflationary" outlook with the Ukraine war, a spike in commodity costs, and a slowdown in China.
China's central bank said on Tuesday it would step up monetary policy support as Beijing races to stamp out a nascent COVID-19 outbreak in the capital and avert the same type of debilitating city-wide lockdown Shanghai has been under for a month.
Precious and Base Metals - Gold price, Silver price, Palladium price
Gold prices slipped 1% to a two-month low earlier today as a rally in the dollar on expectations of faster U.S. rate hikes dented the appeal of greenback-priced bullion. Spot gold fell 0.6% at $1,894.96 per ounce, having dropped to $1,886.09, a low since Feb. 25. U.S gold futures slid 0.4% to $1,896. We are in an environment that is definitely not the best one for gold.
Bullion is slowing down due to the strength of the U.S. dollar and expectations of a hawkish Federal Reserve policy. The dollar index, which measures its performance against a basket of six major currencies, scaled a post-March 2020 peak driven by the prospect of aggressive U.S. rate hikes and safe-haven flows fanned by slowing growth in China and Europe.
Inflation pressure can be positive for gold if central banks are unable to keep the rally of prices under control. Rising U.S. interest rates increased the opportunity cost of holding nonyielding gold, while also boosting the dollar, in which it is priced. The greenback is also seen as a rival safe-haven asset to gold during economic and political crises. So, $1,900 is clearly a pivotal level for today's session. Looking further out, it's not looking ideal at the moment with the U.S. dollar at a 25-month high.
In other metals, spot silver rose 0.4% to $23.57 per ounce, platinum eased 0.6% to $915.37 and palladium jumped 1.7% to $2,224.07.
Traditional Agricultures - Corn futures, Wheat futures, Soybean futures
Wheat and corn futures rose in yesterday’s session, supported by concerns that adverse weather in key production areas would limit the size of harvests this year, traders said. Soybean futures were weak, but losses were kept in check by signs that export demand from China remains strong despite concerns about a slowing economy from the world’s top buyer of soy due to COVID-19 lockdowns.
The US Department of Agriculture (USDA) on Monday afternoon rated 27% of US winter wheat in good-to-excellent condition, down three percentage points from a week ago and the lowest for this time of year since 1989, as drought persists in the Plains wheat belt. USDA also said that corn planting was 7% complete as of April 24, below the average analyst estimate of 9%, and the five-year average of 15%.
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We are at the absolute end of the 3rd wave and it is likely that it ended with the historic peak in January this year. This means that a new downward cycle of a very, very large order is beginning, which will develop in the coming decades.
If the last fifth wave is complete, the correction that will develop is aimed at correcting the entire rise that you see in the charts above. In practice, this is the entire growth of US indices.
At the moment, for me, the bullish scenario remains only as an alternative.
