What is the market worried about? European and American stock markets have dived

Recently, there may have been changes in the macro environment.

Last night, the recent favorable trend in US stocks overall selling prices, fell across the board at the beginning of the opening bell, the three major indexes are out since mid-June, the worst performance of European indices also appeared overall trend of decline, the market seems to be The economy, which had been gradually recovering, changed its view.

There are two main reasons. First, the market seems to have weakened confidence in the economy after the epidemic . Technical factors are also pushing up prices. Investors may withdraw from positions that bet that prices will fall and yields will rise. As a reference, the number of people applying for unemployment benefits for the first time in the United States last week was 373,000, which is higher than the market’s expectations of about 20,000. This shows that the economic recovery may not be as optimistic as everyone thought.

On the other hand, there are concerns about the new coronavirus. The spread of the mutant strain of Delta has made the new coronavirus show signs of resurgence, which has become one of the biggest risks to economic recovery. The most obvious performance is the U.S. 10-year U.S. Treasury yield, which has now fallen to 1.287% . I believe everyone is impressed with this data. To some extent, this is also a reference data for inflation. For a while before, both U.S. stocks and cryptocurrencies were affected by this data. When this data rises suddenly, the panic in the two markets will intensify, causing a decline. So now the question is, since the US stocks and currency markets weaken when the data rises, shouldn’t these two markets become stronger when they fall? Why did the US and European stocks still fall last night?

In fact, there are two logics. When the U.S. Treasury yields continue to rise for 10 years, the market takes into account the logic of inflation. At that time, the government may adopt strategies such as raising interest rates to tighten monetary policy in order to control inflation. After the market has not released the water. Funds will shrink.

This situation last night was based on economic logic. Some of the stocks that led the decline yesterday were all favorable ticket types during the economic recovery period. For example, banks and some industries that would suffer severe injuries due to the epidemic, and when the epidemic has the possibility of renewed, These economic stocks naturally bear the brunt of the decline. The main reason for the decline last night was that the market’s most direct response was now, and then expected. If the epidemic rises, some stocks will fall directly, and the stocks that are pulling may be expected later. If the economic situation deteriorates again in the later period, will the U.S. stock and Bitcoin market fall or rise?

The stocks affected by the pandemic are different. When the pandemic becomes better, it means that the economy becomes better. It is the physical stocks that are good. When the pandemic becomes worse and bad for the economy, the government may release watermarked banknotes again . By then, these printed banknotes will be refunded . Will it flow to certain value stocks, but will it flow to the technology stocks that exploded last year? After all, a lot of bubbles have been pulled out last year, and there will be people who will follow suit?

Not necessarily. Objectively speaking, if the foreign epidemic situation really rises again, then Bitcoin is likely to be positive. After all, it performed so well last year and will once again attract more investment institutions to enter the market. Then there is no bubble in Bitcoin? What other market or underlying bubble will be smaller than a market that has been cut from a high point in half?

Of course, these possibilities are based on the resurgence of foreign epidemics. Going back to the market, today the market did not go too badly. After a small drop at 8 o’clock in the morning, they all started to pull the market. The highest was pulled above 33,000 US dollars and then started to step back. This also shows that the move is not very good. , Maybe this is a more boring trend. Coin World-What is the market worried about?  European and American stock markets have divedThe market cannot be blamed for this kind of trend. After all, in recent times, people have not dared to make much movement until Friday, and they are afraid of experiencing a “bad beat.” Therefore, to some extent, “boring” may be a better trend. . Yesterday’s Bitfinex list seems to have been withdrawn. No matter how bad it is, it hasn’t increased much. There is basically no response today, so the negativeness of this information will decrease a bit. In any case, you must be careful on Friday. Having decided on the direction of the weekend, I can look forward to the $33,000 in the evening.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/what-is-the-market-worried-about-european-and-american-stock-markets-have-dived-2/
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