Categories: Family Office, Financial NewsPublished On: June 21st, 2022Comments Off on Market Update19.9 min read
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1. The Federal Reserve announced a 0.75% rate hike on Wednesday, the biggest single hike since 1994. After Jerome Powell clarified that a 0.75% hike was unusual, the market rose. However, the market resumed its decline again on Thursday. On Friday, the S&P 500 and Nasdaq indexes rose, but the Dow Jones Industrial Index remained below 30,000 points. In our YouTube channel, we would like to remind everyone not to watch single day stock market performances to predict the future stock market as several days of observation are needed to analyze it.
2. In addition to interest rate hikes, the Federal Reserve has lowered the projected economic growth forecast and raised the projected unemployment rate for 2022 and 2023. In the past, only a recession could trigger this kind of unemployment rate increase.
U.S. retail sales data in May slipped 0.3%, the first decline in 2022, showing that rising prices have led to a decline in the purchasing power of cars and high-priced goods and indicating that the economy is gradually losing momentum.
In the event of a recession, we recommend taking a defensive approach, not over-investing in cyclical stocks or high-growth stocks with poor fundamentals, and not being overly aggressive in buying depressed stocks waiting for a rebound.
According to the Financial Times, 70% of economists still believe a recession will occur after 2023. When recession finally arrives and many investors are forced to sell, we should turn to a more aggressive investing strategy.
3. Cryptocurrency snapped its longest streak of losses since 2010, and many related companies have issued negative news. Celsius, a cryptocurrency lending platform, announced a temporary suspension of withdrawal of cryptocurrency. BlockFi, another lending platform, will lay off 20% of its staff, while Coinbase, a cryptocurrency exchange, will lay off 18% of its workforce.
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