Skip to content Skip to footer

Equity Markets, Gold and Oil All Lower With the Dow Plummeting 980 Points to Worst Day Since 2020

Dow plummets in worst day since 2020

Equity markets cratered on Friday with the Dow Jones Industrial dropping over 980 points for its biggest loss since the beginning of the pandemic in 2020.

The sell-off was triggered by disappointing earnings and the spectre of more and larger interest rate increases.

At the ned of trading the Dow was off 2.82%, the S&P 500 fell by 2.77% and the NASDAQ lost 2.55% capping off a disappointing week for U.S. markets.

Gold falls, as Powell says higher rate hikes possible

Gold fell to a multi-week low on Friday, as Fed chair Powell said that a 50 basis point hike was on the table.

Speaking at a panel hosted by the IMF on Friday, Powell said, “I would say that 50 basis points will be on the table for the May meeting”.

💡 Has inflation peaked?
This comes as inflation in the United States rose to record highs earlier this month, with the annual rate of inflation coming in at 8.5%. The highest in 40 years.

Experts are surprisingly relieved as this suggest that US inflation has reached a peak

Powell added that, “Our goal is to use our tools to get demand and supply back in sync so that inflation moves down and does so without a slowdown that amounts to a recession”.

As of writing XAUUSD was trading at $1,935.

CAC40 lower, as France gears up for elections

 The CAC 40 in France ended the week in the red, as markets were preparing for this weekend’s election.

Following the first round of elections, where current President Emmanuel Macron, and Marine Le Pen split the votes, a second round was called in order to name a winner.

💡 More on this
Relations with Russia and managing ties with the Kermlin. Many consider that a vote for Le Pen is an extending hand to Russia after Macron’s attack on Le Pen’s financial links to Russian banks

Both candidates were present for a televised debate, where many believe Macron came out victorious.

Despite this, Le Pen still remains the closest she has been to securing victory in presidential elections, following three attempts.

The Paris based CAC 40 closed 1.99% on Friday.

Oil lower, as market demand slows

Following the comments from Jerome Powell, and recent adjustments to global GDP, oil prices dropped in today’s session.

The IMF and World Bank revised global demand for 2022, with the recent lockdowns in China one of the main contributors to this.

💡 Will consumers move away from oil?
This is a win for ecologists and a worrying trend for oil companies as many analysts continuously hint towards a permanent drop in oil dependency and growth in alternatives

Following weeks of lockdown, Shanghai opted to tighten restrictions opposed to easing them, as cases of COVID-19 still remain high.A statement from the local government stated that, “Our goal is to achieve community zero-Covid as soon as possible.”

Over 25 million people have now been locked down for over three weeks, with tunnels and bridges remaining closed. This has impacted oil demand, with many forecasting further drops in consumption in coming months.

WTI is trading at $101.75 as of writing.

“The difference between successful people and really successful people is that really successful people say no to almost everything.”

-Warren Buffett.

Eliman Dambell

Senior Market Analyst