After a day of cryptocurrency turmoil, global stock markets rebound

Positive employment data in the United States boosted global stock markets on Thursday, and on the second day, the market was turbulent due to the sell-off of cryptocurrencies, suggesting that policymakers are considering scaling back support during the crisis.

The S&P 500 index rose by 1% during New York midday, bringing the blue chip index into a three-day decline. The Nasdaq Composite Index, which focuses on technology stocks, rebounded 1.6%.

The continental European Stoxx 600 index closed up 1.3%, and the London Financial Times 100 FTSE index closed up 1%.

Data released by the Labor Department on Thursday showed that last week’s new unemployment benefits in the United States fell to a pandemic-era low, indicating that layoffs have continued to slow as some states are preparing to stop providing supplementary benefits.

The Fed also issued more optimistic news after the release of the minutes of the meeting on Wednesday, indicating that some policy makers believe that as the pandemic recovery gains momentum, discussions on reducing the size of the central bank’s monthly bond purchases by US$120 billion will need to begin.

The rise in stocks on both sides of the Atlantic on Thursday indicated that the stock market has returned to calm after Wednesday’s stock market volatility. The Standard & Poor’s 500 Index closed down 0.3% after losing 3%, while the Stoxx 600 fell 1.5%. .

“Global risk sentiment seems to be stabilizing… After yesterday’s fear of the spread of the cryptocurrency crisis drove widespread safe-haven trading days across the European and US markets, the European and US markets were in a state of instability long before trading began. [Fed] Minutes”, analysts at JPMorgan Chase wrote.

In terms of currencies, the pound-dollar exchange rate rose 0.5% to 1.4175 US dollars; the euro-dollar exchange rate rose 0.4% to 1.2217 US dollars. The U.S. dollar fell 0.4% against the basket of U.S. dollars.

Arnab Das, a global market strategist at Invesco, said that the overall situation shows that the dollar is weak, as the United States has begun to regain the burden of global growth power from China through expansionary politics.

After the introduction of Chinese regulators, cryptocurrencies continue to face considerable volatility transmit signal Before launching its own digital currency, there may be a crackdown on Wednesday. Bitcoin surged above $60,000 last month and fell as much as 30% on Wednesday to a low of $30,101. By Thursday, this unstable currency was trading at $39,227 per coin.

Treasury Partners Chief Investment Officer Richard Saperstein (Richard Saperstein) said: “In the past few months, stocks and cryptocurrencies have been showing signs of bubbles, and there may be a correction.”

Roger Lee, head of UK equity strategy at Investec, said of the minutes of the Fed meeting: “This is a seasonal transition.” “Obviously, the policy outlook will be tighter, but it is difficult to predict how the stock market will work. .”

He said that although the index level has not changed much, the changes in the industry in the past six weeks have been profound. As inflationary pressures in the United States increase, the technology industry has been one of the victims.

Lee added that the reduction measures are unlikely to take effect immediately, referring to similar measures taken in 2013: “They first started talking about reduction measures in March; now, they started talking about reduction measures. They didn’t start doing anything until December. thing.”

Brent crude oil fell 1.7% to US$65.50 per barrel. It reached US$70 on Tuesday, only the third time since the outbreak of the pandemic.