Global Stocks Gain Ground; Crypto Steadies

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Natural gas prices surge in Europe

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Globally, stocks and bonds have declined this year. Promoting the sell-off is a push by the Federal Reserve and other central banks to suppress inflation, and concerns that higher borrowing costs will push economies into recession.

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In response to the central bank’s moves, investors are selling their most speculative bets. Cryptocurrency prices have been falling steadily, causing many major cryptocurrency companies to lay off employees. On Saturday, bitcoin plunged below $18,000, falling over 70% from its November high of $67,800, before surging higher.

A sudden squeeze in available, spendable capital, often referred to as liquidity, is driving crypto sales, and it’s not something that can be easily fixed, said Ryan Shea, an economist at crypto investment firm Trax. Said at the end of the week. Unlike traditional markets, “there is no central bank to step in and intervene, the process just has to play out,” he said.

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More previously high-flying crypto firms are feeling the pain of what’s been dubbed the “crypto winter”. Cryptocurrency lender Babel Finance told customers on Friday that it was suspending redemptions and withdrawals from all products, citing “unusual liquidity pressures.” One of the largest crypto lenders, Celsius Network LLC, has not allowed users to withdraw funds for almost a week, citing extreme market conditions.

This week, investors will parse Fed Chairman Jerome Powell’s comments to Congress on Wednesday and Thursday. They will seek clues about the prospects for a second consecutive three-quarter-point hike in interest rates in July. Data on housing, manufacturing output and consumer sentiment will help traders gauge the strength of the economy while inflation moves at the highest rate in more than 40 years.

Financial firm ProShares said this week it will roll out the first US-listed short bitcoin futures exchange-traded fund, allowing investors to effectively bet against bitcoin. The Bethesda, MD, firm’s fund, the Short Bitcoin Strategy ETF, will trade on the New York Stock Exchange and will go by the ticker BITI.

The US stock and bond markets were closed for the first time on Monday due to the June twentieth public holiday. The S&P 500 ended its biggest percentage drop last week since the Covid-19-driven crash of March 2020 following the Fed’s decision by investors to raise interest rates by three-quarter-point.

Among commodities, natural gas prices jumped 5.1% to 123.75 euros – the equivalent of about $130 per megawatt in Europe. Russia continues to pump gas through the Nord Stream to Germany at below full capacity.

Edward Parks, Brooks McDonald’s Chief Investment Officer,

Encouraged by the paucity of data on US inflation, investors are expected to turn back into stocks and other riskier assets this week. Stocks will remain volatile until the energy market begins to plummet, he said, easing pressure on central banks to cut consumer-price gains.

Brent crude-oil futures rose 0.4% to $113.56 a barrel after a sharp fall that began on Friday. Concerns that a potential recession would hit oil demand led prices to break a four-week profit streak.

France’s CAC 40 gained 0.6% after President Emmanuel Macron lost a majority in the National Assembly. The outcome of the parliamentary elections will make it difficult for the French leader to pursue his pro-business agenda.

Among individual European stocks, Renault rose 9.7% after analysts at Jefferies raised its target price for the French carmaker. Kingspan Group,

An Irish building and insulation materials manufacturer, fell 13% in the past two months after business conditions worsened.

In Asia, South Korea’s Kospi fell 2%, weighed in by Samsung Electronics,

Which fell after analysts at DB Financial Investments cut the stock’s target price. Japan’s Nikkei 225 fell 0.7%. China’s Shanghai Composite Index was flat and Hong Kong’s Hang Seng edged up 0.3%.

Write to Joe Wallace at [email protected]

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