Global risk appetite sharply deteriorated this past week as the Volatility Index (VIX), which is the market’s preferred ‘fear gauge, closed at its highest since early December.
The most immediate item threatening market sentiment is a hawkish Federal Reserve. A combination of quantitative tightening and rate hike bets are bringing up front-end Treasury yields, or the ‘risk-free’ rate.
A lot of focus is being placed on the growth-oriented tech sector, which has seen the bulk of gains since the global pandemic started.
Monetary policy tightening and reopening threaten reverse capital flows from the sector, leaving the riskiest of investments vulnerable. This also includes cryptocurrency, with Bitcoin trading back under US$40k for the first time since August.
All eyes are on tech earnings after Netflix’s stock was wrecked by dismal subscriber growth projections. Apple, Microsoft, and Tesla are due to report. Some traders argue that a turnaround in sentiment could spell a less hawkish Fed ahead of the January rate decision this week. But, inflation remains well above the target and unemployment is relatively low. The BoC is also ahead as Australia and New Zealand release CPI figures.
- Market Week Ahead: Nasdaq 100, Fed, Tech Earnings, Volatility ReturnsGlobal risk appetite sharply deteriorated this past week as the Volatility Index (VIX), which is the market’s preferred ‘fear gauge, closed at its highest since early December. The most immediate item threatening market sentiment is a hawkish Federal Reserve. A combination of quantitative tightening and rate hike bets are bringing up front-end Treasury yields, or […]
- Markets to Watch This Week: Nasdaq 100, US Dollar,BoJ and moreThere continued to be hesitancy in global market sentiment. Wall Street started off 2022 on a sour note, though the second week was less painful. Nasdaq 100 futures were little changed. This is as Dow Jones and S&P 500 futures declined about 0.8% and 0.3% respectively. European and Asia-Pacific benchmark stock indices did not fare any better. Global monetary policy tightening […]
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