Wall Street has not started the year on a positive note
US equities had a poor start to the new year due to falling tech titans. Interest rates increased throughout the year, putting pressure on once-high-flying growth and large tech firms, and equities concluded 2022 with their poorest performance since 2008.
The Fed started the quickest pace of interest rate rises in decades as part of an effort to combat inflation, and it hasn’t yet ended. At its meeting in December, the central bank said rates will climb further until it was convinced its goal of containing price rises had been achieved.
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The Dow Jones Industrial Average was down 199 points, or 0.6%, while the S&P 500 and the Nasdaq Composite were both down 0.4% and 0.6% respectively. The tech-heavy Nasdaq plummeted 33% last year, while the S&P lost more than 19%.
For the first time since 2021, Apple shares are in danger of closing below a $2 trillion market value after dropping more than 4%. Tesla Inc. shares dropped more than 13% on Tuesday after dropping 65% for 2022 after the company disclosed fewer deliveries than anticipated for the quarter and the full year
New year launches dollar to the green
On Tuesday, the US dollar came back strong and went up against all of its main rivals. The greenback started the day in a bad position, but it started to gain ground early in the European session. This caused stops to be triggered, which sped up its advance even more.
The EUR/USD is trading at about 1.0550 down 1%. The decline appears corrective from a larger viewpoint. The most resilient currency was the pound, which dropped 0.5% to 1.1975 against the dollar.
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While USD/CAD jumped to 1.3680 by 0.73%, AUD/USD is now trading at 0.6730 with a 1.07% decline. Finally, after trading as low as 129.49, the USD/JPY pair concluded the day with no move at about 130.70. The US dollar index also gained nicely to 104.59 by 1.03%.
Oil traded based on recession fears
Oil was not able to break $80. After falling as low as $76.64 earlier, US West Texas Intermediate oil for delivery in February ended the day down $3.33, or 4.1%, at $76.93 per barrel. The price of WTI, the American oil standard, increased 6.7% at year’s end.
After hitting a session low of $81.80 per barrel, Brent oil for delivery in February finished down $3.81, or 4.4%, at $82.10 per barrel. Brent had a 10.5% increase in 2022. It seems like the IMF really spooked investors with their recession forecasts.
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Gold surged over $1,850 before falling back and finished the day higher at about $1,836 per troy ounce. This shows the shiny metal’s potential as a safe haven, as well as being pulled by the dollar. Silver futures for March delivery enjoyed a green year open with a 0.37% rise.
The US is now the focus as the Fed will issue the FOMC Meeting Minutes and the ISM Manufacturing PMI will be delivered on Wednesday.
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