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Equities, Crypto, Energy All Paying the Piper

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The horror show continues. Breaking through floors not breached for a year and a half, in some cases, the stock market in 2022 continues to establish new lows, to the detriment of market participants (who aren’t shorting everything or long bonds, that is). Mega-cap names have already lost a whopping $1 trillion in market value in just the past three sessions, post the latest Fed meeting.

With a 2-year bond currently offering +2.6%, it would seem — near-term, anyway — that TINA (There Is No Alternative) to the stock market has been packed into a trunk somewhere. So the run-up we’ve seen in equities, basically from the second month of the pandemic to the earliest days of the current year, is really paying the piper of late. now that the bond yield situation is growing toward respectability.

The S&P 500 — now sub-4000 for the first time since March of 2021 — dropped another -3.20% on the day, and it was in the middle of the pack on the major indices. The Dow has outperformed its brethren, down another -1.99% today, has fallen -2.4% over the past five sessions, -6% over the past month and -12% year to date.

If you really want to see something frightening, check the Nasdaq: -4.29% today, -7.5% in the past five days, -13.3% over the past month and -26.7% year to date. Currently, roughly 50% of tech stocks are trading -50% from their highs.

Forget TINA — it looks instead like there’s nowhere else to hide: Bitcoin and Ethereum fell -8.7% and -9.6% this year, respectively. Coinbase Global (COIN - Free Report) crashed -20% today alone. Meanwhile, WTI and Brent crude oil prices were -6.7% and -6.5%, respectively, on the day. Oil prices remain over $100 per barrel at this time; we also see multi-decade highs at the gas pump for more Americans, as well.

Put succinctly, making money investing in the markets is often a lot of fun, but now it’s quite the opposite. Perhaps traders enjoying a volatility index in the mid-30s or pure short-sellers continuing the hammer even the most useful tech firms are finding joy in today’s market, but nobody else is. And due to the relatively orderly sell-off, it’s hard to see whether it’s heated panic that’s likely to burn out soon or whether we’ll continue the heavy selling the rest of this week.

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