Following Jerome Powell’s hawkish comments at the annual Jackson Hole Economic Symposium, major stock indexes, cryptocurrencies and precious metals have dropped significantly. More than $240 billion has been erased from the crypto markets, and the Crypto Fear and Greed Index continues to fall, leaning toward “extreme fear.” Additionally, Todd ‘Bubba’ Horwitz, chief strategist at bubbatrading.com, explained that when the Federal Reserve raises interest rates during a recession, it hits what is left of the American middle class hard.
Stocks and crypto spooked by Fed chairman’s hawkish comments – Bitcoin market continues to show strong correlation with three major benchmarks
After Federal Reserve Chairman Jerome Powell explained that it will take “some time” to correct the U.S. economy and current price volatility, the central bank governor said “some pain” will be felt due to the Fed’s tough policies. Wall Street shuddered after Powell’s remarks in Wyoming, with all three major benchmarks (S&P 500, Dow Jones Industrial Average, and Nasdaq Composite) down more than 3% at Friday’s close. The earthquake and tsunami also caused a decline in stock prices.”
The market was more than a little shaken, with the major indices down more than 3%. Stocks that rose in MTD were shaved in the broad indexes, as only Russell 2000 and Russell 2000 Growth were uppic.twitter.com/W10NpeIwi3
– Liz Ann Sonders (@LizAnnSonders) Aug 26, 2022
S&P500 fell 3.37% to close at 4,057.66 points, while the Dow Jones Industrial Average fell over 1,000 points or roughly 3.03 The Dow Jones Industrial Average fell more than 1,000 points, or about 3.03%. Gold (Au) and silver (Au), the world’s two largest precious metals, fell between, ending the weekend at 1.13% (Au) to 1.79% (Au). Platinum (Pt) fell 2.38%, while palladium (Pd) lost 1.49% against the USD.
The cryptocurrency market also did not cope well with the Fed chairman’s comments, with the crypto economyfalling 6% on Friday and another 4% on Saturday afternoon (EST). During the late Saturday afternoon trading session (EST), major crypto asset bitcoin fell below the $20K per unit zone for the first time since mid-July.On August 19, Bitcoin.com News reported that after the CFGI valuation moved higher through August 14, the Crypto Fear and Greed Index (CFGI) reported falling to a score of 33.
The current CFGI score of 28 or “fear” is even lower than the 33 recorded nine days ago. Similarly, the Cboe Volatility Index (VIX) rose 3.78 points following Powell’s 10-minute speech. Nasdaq volatilityhas also fluctuated similarly to the VIX volatility gauge. Researchshows that cryptocurrency and bitcoin markets are more correlatedwith the stock market than ever before.
Cryptocurrency prices move in sync with U.S. stocks, and the correlation between digital assets and the two major indexes, the S&P 500 and the NASDAQ, is higher than ever The correlation between the P500 and the NASDAQ is the strongest since 2010, with the P500 having the highest correlation to the NASDAQ since 2010.
This close relationship has made Bitcoin the stock version (not 49} # private equity)@business pic.twitter.com/fMmYoJH2FS {54> (*English only}
Arcane Research said back in May 2022highlighting the correlation.” Bitcoin’s correlation with S&P 500 also continues to grind upward, currently at 0.59 and near all-time highs.” Bitcoin (BTC) is 71% lower than its all-time high (ATH) printed on November 10, 2021, while Ethereum (ETH) is down 69.6%.
Market strategists expect a 50-60% haircut in the stock market
Worse, many strategists, analysts, and investors believe that global markets are only going to get worse.80} Todd ‘Bubba’ Hologram, chief strategist at bubbatrading.com,Todd ‘Bubba’ Horwitz said in a recent interview with Kitco’s David Lynn (82) that the stock market could fall another 50% from here (83). Horwitz said that his prediction is that the Fed will raise interest rates in what many consider a recession.
Horwitz further noted that the monetary moves could be related to the controversial Great Reset. Horwitz told Hayashi that “[U.S. central banks are] raising interest rates in the middle of a recession.” This has never happened before in history … The political intent behind this is to cause a Great Reset.” Horwitz further emphasized.
[The Biden administration is aiming for the Great Reset. There will be no middle class left.
Horwitz also discussed Powell’s comments at the Jackson Hole Symposium in Wyoming. The market strategist stated. Powell emphasized that he said at last year’s symposium that inflation was transitory, and that “(Powell’s) comments were idiotic.”
“Powell is trying to get away from hyperinflation happening,” Horwitz noted.
“Wait until the price of oil starts to soar again. What do you think inflation will be then? There will be food shortages this year. There will be food riots in many countries,” the strategist added.
The bubbatrading.com analyst concluded that while stocks will suffer, there may still be some opportunistic value in the commodity markets. Under the circumstances, “I would expect to see a 50-60% reduction in these [equity] markets,” Horwitz said. If everyone looked at their finances, they would see that these are indeed recessionary times, and they would be more mindful of their spending.”
What do you think about the correlation between the recent stock market crash and crypto? What do you think about Todd ‘Bubba’ Horwitz’s opinion that stocks will be cut by 50%? Let us know what you think about this subject in the comments section below.
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