Rivian rushes into the basement
Fear of stagflation scares US investors
05/09/2022, 10:16 p.m
Wall Street made massive losses at the beginning of the week. The descent thus continued at an accelerated pace. Concerns about stagflation had weighed on the US stock exchanges in the previous week following the US Federal Reserve’s interest rate hike.
Disappointing economic figures from China and fears of rapidly rising interest rates weighed heavily on US stock exchanges at the start of the week. Of the Dow Jonesindex lost two percent to 32,246 points, S&P 500 (3,991 points) and Nasdaq-Composite (11,623 points) dropped 3.2 and 4.3 percent, respectively. The S&P 500 fell below 4,000 points for the first time since April 2021.
“The fear has gotten so big that everything is being sold and the proverbial baby is being thrown out with the bath water,” said Christopher Grisanti, chief equity strategist at MAI Capital Management. Investors were particularly concerned about long-term interest rates. “The higher they go, the more afraid they are of recession or stagflation.” The yield on the 10-year US bond rose to 3.16 percent, the highest since November 2018. After the US Federal Reserve raised interest rates by half a percentage point last week, many traders are expecting another hike of 0 in June .75 percentage points. “The concern is that the Federal Reserve will essentially ignore market conditions and stock market volatility and proceed with raising interest rates,” said Matt Stucky, portfolio manager at Northwestern Mutual Wealth Management.
Against this background, the climbed dollarindex to 103.71 points, the highest value since December 2002. In the current uncertain environment, the world’s leading currency also benefited from its image as a “safe haven”, wrote the analysts at Barclays Bank. Investors watched the military parade in Moscow marking the anniversary of the Soviet Union’s victory over Nazi Germany in 1945 with a worried expression. In a speech, Russian President Vladimir Putin accused the West of preparing an invasion of his country. Contrary to recent fears, however, he did not announce general mobilization or the use of new weapon systems.
Meanwhile, the cryptocurrency went under the wheels Bitcoin. The price collapsed at its peak by 14 percent to $ 31,282. Ethereum even slipped almost 9 percent. “As interest rates rise, investors are turning their backs on risky asset classes and looking for fixed-income alternatives,” said Emden Research analyst Timo Emden.
Among the biggest losers were Tesla, which dropped more than nine percent at the top. Supplier Quanta, which manufactures computer circuit boards for the electric car manufacturer, is struggling with increasing numbers of corona infections at its production facility in China. This also sets Apple to. The US company relies on Quanta for its MacBooks. Apple shares fell about 3 percent.
Technology stocks like Microsoft, Amazon, Google-Owners Alphabet and Meta lost between 1.7 and 3.3 percent. A media report about the sale of shares in the major investor Ford meanwhile left the shares of Rivian plummeted by around 20 percent to a record low. Ford is selling eight million of its Rivian shares because the holding period for the shares expired on Sunday, CNBC reported over the weekend. According to Refinitiv, Ford was Rivian’s fourth-largest shareholder with an 11.4 percent stake. The electric car maker has lowered its production targets for 2022 because of supply chain problems.
Among the individual shares drew Biontech by 3 percent. In the first quarter, the biopharmaceutical company benefited from high demand for its corona vaccine developed jointly with Pfizer. The Mainz-based company, which is listed on the US stock exchange, has more than tripled its sales and profits compared to the same period last year. Pfizer, on the other hand, fell by 0.8 percent.