From a mass sell-off of tech stocks to a huge cryptocurrency crash, it’s been a tumultuous start to 2022 for the financial markets.
Today, CMTrading lists some of the top trends so far experienced this year and share valuable advice for all traders.
1. Inflation hurting the market
Fred Razak, senior trading specialist at CMTrading, said: “So we haven't hit the first quarter of 2022, ( end March 2022) and we’re seeing very clear trends. One of the things that are leading us into the sell-off of 2022 has been consistent inflation in the market. Products are becoming more expensive, salaries are not keeping up and this combines to stall the economy.”
“So even though governments have been trying through backdoor channels to sustain the economy, it's finally catching up to itself. It's a fairly scary place to be. It’s the transition from recessionary to depression stages that we could possibly go to if we continue on the trajectory that we're going through. We’re going to see some serious situations economically, that may be devastating.
2. ‘We’re in the midst of a massive sell-off'
Razak said: “The Dow Jones is down from its record highs of 36,800 and its trading right now at 34,000, that's nearly a 3000 point retracement. The NASDAQ as well is off of its highs about two and a half thousand points, which represents most of the high-tech stocks. We saw Facebook crash and selling off over 100 points from 330 down to $220. We're in a midst of a massive sell-off in the markets and that is causing the dollar to go up which is the inverse relationship between the NASDAQ, the Dow Jones.
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3. Gold reviving, oil hits record highs
Razak said: “We're watching gold actually revive itself; it's considered a safe haven investment and it's hitting new highs at $1900, a level it hasn’t been for quite some time. It’s interesting as the all-time high was about $2000 per ounce. We’re also seeing oil revive and thrive, hitting the $90 range and beyond. This is because we’re expecting global economies to open up and travel to resume in full.
4. Huge potential for crypto despite the crash
Razak said: “Looking at crypto and Bitcoin, it doesn't have the notoriety and the validity of some of the more established markets that we know. It’s still being used and bought despite the earlier crash in January. It has way more to go in terms of day-to-day usage. So I think there's still gonna be tremendous potential in crypto and Bitcoin in the coming years.”
5. Stocks are being ‘hit hard’
Razak said: “Now looking at stocks you're seeing them get hit very hard right now. I mentioned how Facebook got hit hard this year. Some consumer stocks are still doing well, however; Amazon is doing well, while Microsoft is actually selling off. So it’s stock-specific and hasn't been systemic across the board that you're seeing a clear indication that we're headed into a “sell off” kind of environment.
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