The sell-off on Wall Street resumed on Thursday, as a surprisingly stronger-than-expected US Q3 final GDP reading sparked new concerns for a prolonged rate-hike cycle by the US Federal Reserve.
The US final GDP printed at 3.2%, up from the previous read of 2.9% in the third quarter. Jobless claims for the last week is also less than the forecasted figure. Following the BoJ’s policy tweaks on Wednesday, the central banks’ aggressive rate hikes may lead to a hard recession in the global economy in 2023. The fear gauge, VIX, jumped 9% to nearly 22, suggesting investors became more concerned about the market conditions.
While the US dollar strengthened against most major G10 currencies for the second straight trading day, commodities were under pressure, with gold futures down 1.5%, falling below key support of 1,800 again. US PCE data that gauges inflation from the consumer's perspective will be closely watch later on Friday.
- All 11 sectors in the S&P 500 finished lower amid a broad-based sell-off. Defensive sectors, including utilities, consumer staples, and healthcare were relatively stronger, down less than 1% as investors sought safety, while consumer discretionary, technology, and energy all fell by more than 2%. All the big tech shares were down between 2-3%, with Apple sliding 2.4% and Amazon declining 3.4%.
- Tesla shares slashed another 9% amid Elon Musk's Twitter addiction and the weakened EV demand outlook. Musk has sold his Tesla shares several times since he announced buying Twitter. The aggressive incentives and discounts that Tesla offers to push sales in the final month, have also caused investors to doubt if the EV maker could hit its growth target for the fiscal year 2022.
- Google’s new performance rating system will make more employees fall into lower-rated categories in 2023. Under the new system, Google estimates employees who may fall into the low-ranking category will increase to 6% from 2% and those who could reach the highest categories will reduce to 22% from 27%.
- The Chinese yuan weakened against the greenback, with USD/CNH again rising above the key level of 7 as the US dollar again became a haven currency amid renewed recession fears.
- Gold futures slumped amid strengthened USD and a rebound in the US short-dated bond yields. The precious metal fell to just below 1,800, approaching a further support of 1,770. But gold surged about 67% since its November low and could be still in favour in a recessionary scenario in 2023.
- Futures point to a lower open across the Asian equity markets. ASX futures were down 1.03%, Nikkei 225 futures fell 1.21% and Hang Seng Index futures slipped 2.13%.
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