Markets slide as run on digital asset exchanges continues to cause crypto havoc

 

Stocks fell to start the week as investors took a pause from last week’s big rally and digested a slew of corporate and economic news. The major stock indexes came off their lows after Federal Reserve Vice Chair Lael Brainard indicated the central bank could soon slow the pace of its interest rate increases, providing some comfort to the market.

Looking ahead, the third-quarter earnings season is set to continue, with a heavy emphasis on retail. Big retailers Walmart, Home Depot, Target, Lowe’s, Macy’s and Kohl’s are all slated to post numbers this week.

Ahead of Brainard’s comments, stocks briefly fell near session lows following reports that Amazon will lay off about 10,000 employees as early as this week.

The Dow Jones Industrial Average fell 0.6%. The broad market S&P 500 was lower by 0.9%, and the Nasdaq Composite dropped 1.1%.

Chinese stocks continued to outperform the broader index as the easing of COVID restrictions improves sentiment towards China.

And digital asset exchanges are rushing to reassure clients that their funds are safe as the collapse of Sam Bankman-Fried’s FTX crypto exchange ricochets through the industry. Binance, the world’s biggest crypto trading venue, as well as smaller rivals including Crypto.com and the US listed Coinbase have vowed to publish proof that they hold sufficient reserves to match their liabilities to customers.

FTX had less than $1bn in easily sellable assets against $9bn in liabilities before it went bankrupt on Friday, the Financial Times reported.

The sudden collapse last week of FTX and Bankman-Fried’s trading shop Alameda Research, once viewed as pillars of the industry, has severely eroded confidence in the digital asset market.

And it appears that investors are happy to be leveraged long at the moment as fund flow into leveraged ETFs hit record levels – with $18.5bn flowing calendar year to date – a record level.

Across the sectors, it was all red on the board except for Health Care which closed flat.

Moderna shares rose over 4.5% after the COVID-19 vaccine provider said tests show its boosters are effective against sub variants of the virus.

And shares of Opiant Pharmaceuticals surged 114% after the maker of the overdose-reversal drug, Narcan, announced it is being purchased by UK drugmaker Indivior for approximately $145 million.

And oat-based drinks maker Oatly tumbled over 12.5% after the company reported a larger-than-expected quarterly loss, and revenue that fell short of consensus. Oatly cited China Covid restrictions, production challenges and a stronger US dollar for the weakness in its performance.

Currencies

One Australian dollar at 8:15 AM has weakened compared to the US dollar yesterday buying 67.01 US cents (Mon: 68.69 US cents), 57.03 Pence Sterling, 93.71 Yen and 64.90 Euro cents.

Commodities

Iron ore futures are pointing to a 0.4 per cent gain.

Gold added $5.40 or 0.3 per cent to US$1774.80 an ounce.

Silver gained $0.40 or 1.8 per cent to US$22.07 an ounce.

Copper dropped $7.85 or 2 per cent to US$383.50 a pound.

Oil lost $3.75 or 4.2 per cent to US$85.21 a barrel.

Futures

The SPI futures are pointing to a 0.5 per cent fall.

Figures around the globe

Across the Atlantic, European markets closed higher. Paris added 0.2 per cent, Frankfurt gained 0.6 per cent and London’s FTSE closed 0.9 per cent higher.

In Asian markets, Tokyo’s Nikkei fell 1.1 per cent, Hong Kong’s Hang Seng added 1.7 per cent and China’s Shanghai Composite fell 0.1 per cent.

Yesterday, the Australian sharemarket lost 0.2 per cent to close at 7146.

Ex-dividends

Dicker Data (ASX:DDR) is paying 13 cents fully franked
National Australia Bank (ASX:NAB) is paying 78 cents fully franked
Plato Income Maximiser (ASX:PL8) is paying 0.55 cents fully franked
QV Equities (ASX:QVE) is paying 1.3 cents fully franked

Dividends payable

Autosports Group (ASX:ASG)
Rand Mining (ASX:RND)
Tribune Resources (ASX:TBR)
Waypoint REIT (ASX:WPR)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
Copyright 2022 – Finance News Network

Source: Finance News Network