What to watch in the second half? [Video]
|The first half is finally over, but the pain is certainly here to stay.
Economic data looks bad, employment softens, and inflation is up. The S&P500 closed the first half in the bear market, having lost more than 20% since the beginning of the year, while Nasdaq, which is more sensitive to the Fed policy and to the rising interest rates, closed the first half more than 30% down.
Gold did a good job as a hedge to turmoiled markets, but the rising US yields increase the opportunity cost of holding the non-interest-bearing gold certainly limited the upside potential of the precious metal.
Bitcoin proved to be an imperfect hedge against both inflation and the falling markets, while the DAX is down by more than 20%, and the FTSE, which benefited from surging oil and commodity prices, could lose its advance.
Funnily, Chinese stocks diverged positively in the latest quarter, to catch up the losses for the year. Nasdaq’s Golden Dragon China index rebounded by more than 65% since the March dip.
What’s next? The pain may not be over, as the Fed is expected to remain as aggressive as needed until it sees a material and a persistent softening in inflation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.