- Market moves were recently explained by global head equities strategist at Goldman Sachs.
- Jobs numbers that were lower than anticipated also played a role.
This past week’s financial market selloff is proof that market participants are worried about a US recession. Even if some experts have eased worries about the economy, helping the market as a whole recover. Others are still waiting for further signs before jumping into the investing field. Put another way, there are investors who are trying to get a feel for the stock. And the crypto market selloff isn’t going away anytime soon.
Market moves were recently explained by Peter Oppenheimer, global head equities strategist at Goldman Sachs. To help put the current market changes in perspective, he provided some historical background.
Substantial Impact
At the same time, the unwind of the carry trade was the main driver of the recent sell-off in the global financial markets, adding to the fears about a US recession. To put it in perspective, the investors here take out loans denominated in a lower-yielding currency (the yen) in order to invest in a higher-yielding currency (the dollar).
The yen hit a four-month high against the dollar last week as the Bank of Japan launched its biggest rate hike since 2007. The dollar lost value at the same time as US Federal Reserve officials hinted at possible interest rate reduction. The popular carry trade unwind as a result of this situation, which added to the market sell-off.
Jobs numbers that were lower than anticipated also played a role. Unemployment rose beyond 4.3% and initial jobless claims unemployment benefits were lower than expected, setting off the Sahm Rule, a leading indication of a recession.
As fears of a US recession intensified, these factors combined to provide the worst trading day for the S&P 500 in over two years, with a substantial impact on the crypto market. However, Bitcoin has shown resilience and reached $60,000 mark at the time of writing.
Highlighted Crypto News Today:
Ethereum Price Struggles to Break $2.5K Resistance Amid ETF Outflows
