Fun

Stock market slump trickles into today’s Bitcoin and altcoin correction

News Feed - 2024-07-19 07:07:29

Marcel Pechman1 hour agoStock market slump trickles into today’s Bitcoin and altcoin correctionWhat’s behind the correction in the US stock market and how might it continue to negatively impact cryptocurrencies?1563 Total views96 Total sharesListen to article 0:00Market AnalysisOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThe S&P 500 index experienced a 2.6% decline over the past two days, testing the 5,523 level on July 18. This correction erased gains from the previous two weeks but saw decent buying activity in the last trading hours after chipmaker Taiwan Semiconductor Manufacturing Company (TSM) reported earnings above market consensus.


Investor morale was negatively affected, which partially explains why Bitcoin (BTC) and Ether (ETH) traded down on July 18. Understanding the reasons behind the US stock market decline is essential to determine whether cryptocurrencies should sustain a positive correlation.Bitcoin/USD index (left) vs. S&P 500 index futures (right), 1-hour. Source: TradingViewRising jobless claims and economic concerns


Fear of rising inflation due to unsustainable government debt might present a short-term negative impact but it also opens an opportunity as investors seek alternative scarce assets. However, if investors feel that the economy is worsening, especially in the job market, traders are likely to seek protection in cash and short-term government bonds.


On July 18, the US Department of Labor reported that continuing jobless claims increased to a seasonally adjusted 1.867 million during the week ending July 6, the highest level since November 2021.


This metric focuses on the number of people receiving benefits after an initial week of aid, thus serving as a proxy for hiring. This data is especially negative for the real estate market, which in turn puts the financial sector at risk.


Federal Reserve chair Jerome Powell told the US Senate Banking Committee on July 9 that the commercial real estate sector poses major risks, especially for small banks with concentrated exposure, according to CRE Daily. Powell stressed the importance of banks honestly assessing and managing their risks, as the commercial sector’s challenges are expected to persist for years due to hybrid work.


Additionally, minutes from the June FOMC meeting revealed that credit quality deteriorated further in April and May, especially in the office, hotel, and retail sectors, with rising overdue delinquency rates. This scenario partially explains the weakness in the banking sector on July 18, with JP Morgan (JPM) trading down 3.2%, Wells Fargo (WFC) down 2.8%, and Bank of America (BAC) declining 2%.Possible tech export restrictions impact on markets


Meanwhile, US-listed tech stocks were negatively impacted after Bloomberg reported that the US is analyzing rules to control the exports of American technology, a lynchpin to artificial intelligence. Although focused on curbing China’s edge in chipmaking processes, such a move would curb billions of dollars in sales for these companies. Shares of Advanced Micro Devices (AMD) traded down 3.1%, while ASML Holding (ASML) declined 2%.


Jim Covello, head of equity research at Goldman Sachs, issued a warningthat the artificial intelligence (AI) investment frenzy may lead to an economic bubble, as reported by Bloomberg. Covello notes that AI investments have yielded modest returns, with Microsoft, Google, and Amazon attributing only 7% of cloud service sales growth to AI. Yet, Covello doesn’t see this happening soon, as ongoing investments keep driving stocks like Nvidia.


Related:Meta won’t launch new AI products in EU, citing ‘regulatory uncertainty’


David Bahnsen, founder and chief investment officer at the Bahnsen Group, echoes this caution, avoiding large tech stocks, fearing a repeat of the dot-com bust, and anticipating significant investor losses if they don’t divest in time. Bloomberg cites a survey conducted by Lucidworks, which shows that less than half of the companies investing in AI have yet to see a significant return.


Such analysis justifies the 2.5% decline in Amazon"s (AMZN) stock and 2.2% in Google (GOOGL) and Apple"s (AAPL) stock, which in turn spread pessimistic sentiment to other markets, including cryptocurrencies.


This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.# Bitcoin# Cryptocurrencies# Apple# Google# AMD# Amazon# China# Banks# Ethereum# Bitcoin Price# Bank of America# Markets# Stocks# Wells Fargo# Market AnalysisAdd reaction

News Feed

Turner Wright6 hours agoPro-crypto lawmaker Tom Emmer wins Republican nomination for House speakerIt’s unclear if Emmer will have enough support to win in a full floor vote, but the lack of a speaker of the House has e
Bitcoin Price Bounces Off Re-Accumulation Zone: Why $120,000 Could Be Next
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
XRP Bullish Pennant Targets $15-$17, But Breakout Confirmation Required At This Level
Este artículo también está disponible en español. XRP experienced a brief rally after the US Securities and Exchange Commission acknowledgedGrayscale’s XRP ETF filing,
Ethereum Reaches $4,100 For The First Time In Over Three Years, Aiming For $5,000 Next
Este artículo también está disponible en español. For the first time in over three years, Ethereum (ETH) has reached the significant price milestone of $4,100. This level
David Attlee14 hours agoSingapore Red Cross starts accepting crypto donationsHumanitarian aid and community services charity Red Cross Singapore included cryptocurrency as a newly accepted form of donation.2150 Total vie
Avalanche Value Surges Reaching an All-Time High, AVAX Joins the Top Ten Crypto Markets
Avalanche Value Surges Reaching an All-Time High, AVAX Joins the Top Ten Crypto Markets Cryptocurrency markets have started to recuperate from last week’s losses as bitcoin,
$96k Or $144k? Bitcoin Mayer Multiple Chart Price Target Options
Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and pu
Bitcoin, Ethereum Technical Analysis: BTC, ETH Remain Higher Ahead of Fed Rate Decision
Bitcoin, Ethereum Technical Analysis: BTC, ETH Remain Higher Ahead of Fed Rate Decision Bitcoin continues to trade close to $18,000 on Wednesday, as markets remain bullish, followi
UP Alliance Members to Lock Mega-Utility Tokens for a Year
UP Alliance Members to Lock Mega-Utility Tokens for a Year Universal Protocol Token is a mega-utility token offering attractive interest rates when lending and borrowing, lower e
Is the altcoin market set for an ‘explosive rally?’ Analysts eye these 3 indicators
Ciaran Lyons3 hours agoIs the altcoin market set for an ‘explosive rally?’ Analysts eye these 3 indicatorsAlthough the altcoin market cap has declined nearly 20% over the past month, traders remain bullish, anticipat
Payments Giant NCR Acquiring Libertyx to Offer Complete Crypto Solution
Payments Giant NCR Acquiring Libertyx to Offer Complete Crypto Solution NCR Corp., a global leader in ATM software applications, has announced that it is acquiri
VC Roundup: Investors double down on funding for crypto, blockchain startups
Ana Paula Pereira4 hours agoVC Roundup: Investors double down on funding for crypto, blockchain startupsThis edition of Cointelegraph’s VC roundup features Plural Energy, Everclear, Ava Protocol, GoPlus and other start