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S&P 500 drops to one-year low as selling continues

negative prices on a screen

The bloodletting on stock markets has continued today as we start a new week with the DAX and FTSE 100 plunging below their April lows, with the biggest declines being seen in basic resources, after the latest China trade data showed that imports ground to a halt in April, while exports rose 3.9%, well below the 14.7% gains seen in February.


The stubborn pursuit by Chinese authorities of a zero-Covid policy is raising concerns that it will have a chilling effect on the Chinese economy in the months ahead, and with Beijing and Shanghai tightening curbs on resident of those cities, we appear to be seeing a realisation that supply chain issues may still have some way to go as far as downside risk is concerned, with dire consequences for growth prospects.

The biggest fallers have been basic resources with Glencore, Rio Tinto and Antofagasta under pressure, but the declines have also been broad based offering fewer places to hide out. Other big fallers include Scottish Mortgage Investment Trust whose main shareholdings include Tencent, Meituan, Moderna, Illumina, Tesla, Nvidia and Amazon, all of which have seen heavy losses since the start of the year.

Rightmove shares have also seen a sharp decline on the news that CEO Peter Brooks-Johnson announced his departure as CEO after five years in the role. The timing of departure is naturally raising concern about the motives behind the move, at a time when interest rates are rising to their highest levels in a decade, and the cost of living is starting to bite.

We’ve also seen some sharp moves lower in gaming companies with Flutter Entertainment, and Entain slipping sharply. This appears to have followed in the footsteps of US gaming companies, like DraftKings which saw big declines on Friday, and is lower again today.     


US markets have opened sharply lower today taking their cues from the weakness being seen in European markets, amidst concerns that the global economy is heading for a significant slowdown against a backdrop of a Chinese government that shows little sign of deviating from its zero-covid policy.

We hear a lot about the resilience of the US economy as borne out by Friday’s positive jobs report, however there’s been little mention of another big jump in US consumer credit for March which rose to another record high, coming in at $52.4bn, from $37.7bn in February, with revolving credit rising by 21.4%. This was more than double market expectations. With interest rates soaring in the US, one has to question whether this sort of credit growth is sustainable, as consumers feel the pinch even more.

The Nasdaq 100 is once again leading the weakness in US markets, while the decline in cryptocurrencies is weighing on the likes of Coinbase which has fallen to new record lows ahead of the release of their Q1 numbers tomorrow. We’re also seeing weakness in the likes of MicroStrategy, Block and Riot Blockchain.

Today’s weakness has also seen the S&P 500 follow the Nasdaq in falling to one-year lows, and is within touching distance of the 4,000 level, a break of which could trigger further losses.  

Rivian shares have also slid to new record lows, ahead of its latest Q1 numbers, which are due on Wednesday, on reports that Ford, a key stakeholder in the business, has sold out 8m shares at a discount to Friday’s close. We’ve also got the latest Q1 numbers from online car seller Vroom and cinema chain AMC Entertainment, neither of which are expected to be well received, and both of which are seeing their shares heavily punished in early US trading.  


The US dollar has pushed up to a new 20-year high today, the third day in succession it has done this, with little sign of waning momentum, even though the gains are incremental in nature. Continued weakness in equity markets, along with

The Australian dollar has been the worst performer largely due to concerns about the Chinese economy and demand for Australian basic resource exports, as markets rebase their expectations for Chinese economic demand this year.  The Norwegian Krone is also weaker on the back of a decline in crude oil prices.


Gold prices are under pressure again, sliding back towards two-month lows as US 10-year yields hit 3.2% and their highest levels since 2018, when they peaked at 3.25%

The difficulty in reaching a consensus on a Russian oil ban by EU leaders is prompting weakness in crude oil prices today, although this morning’s weak China trade numbers have also weighed into the overall calculus, as Brent prices drop below $110 a barrel on expectations of a slide in Chinese demand. The strength of the US dollar is also a headwind to higher oil prices.

Cryptos are also getting crushed today with Dash, Solana and Cardano seeing some of the heaviest losses, while bitcoin has fallen below its lowest levels this year with the $30,000 level the next key support.  


Economic headlines over the last week have been somewhat gloomy, focusing on the idea that future central bank rate hikes are still to be seen and how recession now looks inevitable in many of the world’s largest economies. Against that backdrop there was perhaps one stock which stood out more than others, namely Booking Holdings. They’re the company behind names like OpenTable, Priceline as well as the eponymous An earnings release mid-week, initially approached with some scepticism by the market, ended up being far more upbeat than had been expected and came with a positive outlook, too. This left the underlying stock bouncing in a 15% range, lifting daily vol by the end of the week to 227% against a monthly print of 104%.

Big tech stocks were in focus as the market responded to the Fed’s rate hike and those recession fears. This was particularly evident in our JK FutureOfWork proprietary share basket, which sold off 10% from mid-week highs. Daily vol, sitting at 89% early in the week, rose to 149% by Friday, against a corresponding monthly reading of 87%.

That rate call from the Fed – which many took the view could have been far more hawkish – was sufficient to take a toll on the US dollar, at least in the short term. One notable beneficiary here was the Kiwi Dollar, which had traded down to close on two-year highs. The resulting rebound was sufficient to drive daily vol on NZD/USD to 21.94% on Thursday, close to double the monthly reading of 12.22%.

Rounding out with cryptos, tron was again the most active in the asset class. The coin has made pronounced gains over the last week, bucking the trend seen by many in the sector, driving price action as a result. Daily vol reached 192% last Monday before coming off a little then moving back out 138% on Friday, against a monthly reading of between 75% and 89%.

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