Stock and oil markets are worried after the decision to raise interest rates and the dollar continues to rise

Global investors are bracing for more chaos in the market after
a busy week of asset prices around the world,
and oil prices declined on concern over the economic recession,
as the US dollar climbs against a basket of other currencies in recent trading on Friday.

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Stocks decline with a third-rate hike

Oil prices fall amid recession concerns

USD rises in recent trading on Friday

Stocks decline with a third-rate hike

The Fed raised its rate for the third consecutive time by seventy-five basis points,
while Japan stepped in to support the yen for the first time since 1998.

The Dow Jones Industrial Index is close to joining the S&P 500 and Nasdaq in a bear market,
while bonds declined to their lowest level in years as investors re-calibrated their portfolios
with a world of persistent inflation and rising interest rates.

On Friday, the Dow closed sharply lower for the week and briefly fell into a bear market zone,
as investors worry about the possibility of a deeper recession amid growing concern
that the Federal Reserve will outpace interest rate hikes.

The Dow Jones Industrial Index fell by 1.6 percent,
or 486 points, heading into the downturn zone on Friday,
with losses exceeding 20 percent from January’s peak.

The US dollar was above all that,
jumping to a 20-year high against a basket of currencies,
supported in part by investors looking for shelter from extreme market volatility.

Analysts believe that time is still available to buy into stocks
until we see signs that the market has reached the bottom.
The market is getting closer and closer to pricing in this widely
anticipated recession but is not yet fully priced.

Bond yields that move inversely with prices have risen, worldwide.
Benchmark 10-year US Treasury yields reached
their highest level in more than 12 years,
while the two-year German bond yield rose above
2 percent for the first time since late 2008.

In the UK,

five-year Treasury bonds jumped 50 basis points,
the biggest one-day jump since at least late 1991.

The S&P 500 fell by 1.7 percent during Friday trading,
closing at its lowest level since June,
and the Nasdaq fell by 1.8 percent.

The Dow also fell due to a more than 5 percent drop in Boeing (its NYSE symbol),
after the airline said it had reached a $200 million settlement over
misleading accusations about 737 Max crashes.

Consumer stocks,
which are also highly vulnerable to slowing economic growth,
fell by more than 2 percent as investors priced
in weak consumer spending.

Amazon stock fell more than 3 percent,
while travel and leisure stocks deepened their weekly losses.

artical name Stock and oil markets are worried

Oil prices fall amid recession concerns

Hedge funds worldwide fled their positions
in energy stocks,
bonds and futures last week just in time
to miss this week’s moves in oil.

Funds have declined from their long and
short positions in energy stocks,
bonds and futures in the week ending September 16,
more than at any other time in recent months.

It may be a sign that hedge funds,
which often discover trading ideas from market trends,
find it very difficult to achieve the kind of wages
they received from higher oil prices earlier this year.

The move in energy positions came before
oil jumped nearly 3 percent on Wednesday after
Russian President Vladimir Putin announced an escalation of
the war in Ukraine and then declined about 4 percent on news
of a rise in US crude oil and gas supplies.

On Friday,

oil prices hit their lowest levels since January,
concerned about a recession that has engulfed global markets,
while Brent remains up by about 12 percent this year to date.

Analysts are of the view that hedge funds trading
using systematically programmed algorithms
do not necessarily shorten the market,
but have abandoned their positions because
there is no trend in the prices of oil,
gas and other energy products.

Energy prices fell by 6 percent,
under pressure from the dollar’s rise and concerns
that a deeper global recession would hurt energy demand.

Concern over a recession intensified this week after
Federal Reserve Chairman Jerome Powell indicated that
the central bank would remain on a mission to reduce
inflation at the expense of economic growth.

artical name Stock and oil markets are worried

USD rises in recent trading on Friday

The euro and sterling fell to 20 and 37-year lows against Friday’s rise
in the US dollar after surveys showed business
activity slowing across the eurozone.

The dollar index, which measures the greenback against
a basket of currencies including the euro,
sterling and the yen, jumped to 113.23,
its highest level since May 2002 and topped
its two-decade high earlier this week.

The last trading rose by 1.6 percent to 112.96,
marking the largest weekly percentage rise since March 2020.

Sterling recorded its biggest weekly decline against
the US dollar in two years after
approaching a 37-year low of $1.0840.

Sterling was the biggest loser on Friday against the dollar,
declining by 3.4 percent to $1.0874,
and also suffered the biggest daily percentage loss in two years.

artical name Stock and oil markets are worried

Stock and oil markets are worried

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