On Monday (9th) local time, the three major stock indexes of the US stock market collectively fell sharply. Markets feared that aggressive Fed tightening could lead to a recession, with the Dow down 1.99 percent, the NASDAQ down 4.29 percent, and the S&P 500 down 3.2 percent to the 4,000-point mark for the first time since April 2021.
So far, the US stock market has fallen for three consecutive days, hitting a new low of 52 weeks. After Monday's fall, the S&P 500 has slipped more than 16 percent from its year's high. The Nasdaq Composite is down nearly 26 percent so far this year.
U.S. stocks fell again
Musk's net worth has shrunk dramatically
On Monday (May 9), the three major U.S. stock indexes closed sharply lower, with the Dow down 1.99%, the S&P 500 down 3.2% and the NASDAQ down 4.29%. Boeing fell more than 10 percent, leading the Dow.
Big tech stocks were down across the board, with Apple down 3.08 percent, Amazon down 5.12 percent, Netflix down 4.35 percent, Google down 2.7 percent, Facebook down 3.71 percent, and Microsoft down 3.67 percent.
There are nearly 7,000 (6,947, excluding OTC) listed companies in the U.S. stock market, and the total market value loss last night was as high as $2.1 trillion, about 14.18 trillion yuan (offshore rmb spot exchange rate, 6.7558, the same below); of which the top 20 companies with the most losses in the S&P 500 index contributed $598.9 billion in market value losses (about 4 trillion yuan).
On the Forbes Global Real-Time Rich List, Musk was undoubtedly the biggest "loser" last night. Tesla shares fell more than 9 percent last night to below $800, and the world's richest man also shrank by $18.7 billion.
Most of the popular Chinese stocks fell, touchpal fell 76.92%, Canaan Technology fell 25.37%, New Oriental fell 16.56%, Waterdrop fell 15.2%, Fangduoduo fell 14.23%, iQiyi fell 10.9%, Bilibili fell 9.83%, JD.com fell 8.22%, Baidu fell 8.68%, Alibaba fell 5.77%. In terms of gains, Lanting Set rose 2.95%, Dingdong bought vegetables rose 1.63%, and Fangtianxia rose 1.43%. New energy vehicle stocks fell across the board, with WEI AUTO down 8.98%, Xiaopeng Auto down 10.14%, and Ideal Auto down 9.66%.
Fears that the Fed's measures to rein in inflation could lead to a recession, a panic sell-off resurged on Monday, with central banks around the world raising interest rates in an attempt to curb rising inflation, with some in the industry believing U.S. stocks would suffer more sell-off this summer.
According to the Wall Street Journal, some macro analysts pointed out that US stock prices are quite high, especially technology stocks, and it is not clear how the Fed can control inflation, "there are many negative effects happening in the market."
Michael Hartnett, chief investment strategist at Bank of America's Global Research Division, said in a note on Friday that investors will be dealing with inflation, interest rate and recession shocks for much of 2022. Bank of America notes that the U.S. stock market has experienced 19 bear markets over the past 140 years, with an average decline of 37.3 percent and an average duration of 289 days.
Although past performance is not fully representative of future performance, if you take historical performance as a reference, the bank of America team calculated that the current bear market will end on October 19 this year, when the S&P 500 index will reach 3,000 points and the NASDAQ composite index will reach 10,000 points.
One of the "good news" brought by bank of America is that many stocks in the US stock market have fallen to bear market areas.
Crude oil also fell sharply due to concerns about demand
Crude oil futures prices also fell sharply on Monday as traders feared a global recession could dampen oil demand and cause the energy sector to fall. The U.S. oil contract for June fell 6.76 percent at $102.35 a barrel. The Oil For July contract fell 6.57 percent at $105.01 a barrel.
Energy industry leader Chevron shares fell 6.7 percent, ExxonMobil fell 7.85 percent, ConocoPhillips fell 9.75 percent, Occidental oil fell 10.93 percent and Marathon Oil fell more than 14.0 percent.
For the sharp drop in oil prices on Monday, some analysts pointed out that the sharp decline in global stock markets on Monday dragged down the crude oil market. But technical analysts say U.S. oil is still on a short-term upward trend. The current embargo proposal would end almost all OF the EU's purchases of Russian crude in a few months, which could lead to a further decline in Russian crude production and could keep U.S. oil above $100 for the time being.
The latest fed report: Inflation uncertainty
Increased risk of financial and economic activity
On May 9, local time, the Federal Reserve released its latest financial stability report. The report shows that uncertainty about the economic outlook has increased since the financial stability report was issued last November; prices of risky financial assets have remained high overall, with inflation uncertainty posing financial and economic risks; and A sharp rise in U.S. housing prices, which could be sensitive to market volatility. Liquidity conditions in major financial markets are deteriorating due to rising risks from the Russian-Ukrainian conflict, monetary tightening and high inflation.
The Fed said in the report: "According to some indicators, the liquidity of the recently issued US cash Treasury bonds and stock index futures markets has declined since the end of 2021. ”
"While recent liquidity deterioration has not been as extreme as some past events, the risk of a sudden significant deterioration appears to be above normal," the report added. In addition, since the outbreak of the conflict between Russia and Ukraine, liquidity in the oil futures market has been sometimes tight, while some of the other affected commodity markets have been significantly dysfunctional. ”
Fed officials are increasingly expressing their views on the Fed's monetary policy.
On May 9, local time, Atlanta Fed President Raphael W. Bostic said that the Fed could stick to a half-percentage point rate hike in the next two to three meetings, then assess the response of the economy and inflation, and then decide whether further rate hikes are needed.
"The half-percentage point increase approved by the Fed last week 'is already a pretty aggressive move.' We don't need to take a more radical approach. In comments to Bloomberg, Bostic said that seemed to rule out a faster 0.75 percentage point hike.
On the same day, Minneapolis Fed President Neel Kashkari said he was confident of returning inflation to its 2 percent target, though it would take longer than he expected.
Kashkali also said the burden of monetary tightening would fall on low-income people.
Editor| Lu Xiangyong and Du Hengfeng
Proofreader | Sun Zhicheng
Daily Economic News is synthesized from Wind, Financial Associated Press, and The Paper