Market Roller-coaster Drops On Higher Interest Rate Fears, As AI Bets Fade

This is our weekly market update, where we start in the US, cross to Europe and Asia, and end in Australia, covering commodities and crypto along the way. While last week AI drove most markets higher, concerns about accelerating inflation surged this week, triggering a spike in global bond yields amid the likelihood of higher-for-longer oil prices and higher interest rates. Traders also took some profit taking during the final Wall Street session of the week. Bank of America strategist Michael Hartnett said “bull capitulation into stocks and tech” will likely be fully complete in next few weeks, with early June “ripe” for profit taking. The Global MSCI Index was down 1.53% on Friday and down 0.6% for the week, while the Asia ex Japan index dropped 3.65% and the European STOXX 600 dropped 1.48%. The ASX 200 in Australia dropped another 1.3% for the week, to be down 3.52% over the past month. U.S. President Donald Trump finished his two-day meeting with China’s President Xi Jinping, which yielded little headway with regard to reopening the Strait of Hormuz. Trump also said his patience with Iran was running out. Washington and Tehran remain locked in an impasse, and the Strait of Hormuz remains shut. The effective closure of the chokepoint by Iran since the start of the conflict at the end of February has led to the biggest oil supply disruption in history. The clocks are ticking…. Brent Oil spiked back above $US109 a barrel, while gold fell below $US4600 an ounce. There was no specific escalation in hostilities between the US and Iran, but it is becoming clearer that there will be no near-term resolution either, leaving the Strait of Hormuz effectively closed indefinitely. Dutch Natural Gas Prices rose 13.65% for the week, to be up 78% year to date. Inflation data out of several European countries and the U.S. this week showed that the jump in energy costs are appearing in consumer and producer prices, prompting investors to price in at least two rate hikes by the end of the year by the European Central Bank. Reflecting this, bond markets also witnessed a selloff. European stocks fell sharply on Friday, pressured by political instability in the United Kingdom and persistent uncertainty surrounding the Iran conflict. The pan-European Stoxx 600 fell 1.5%, Germany’s DAX dropped 2.1%, France’s CAC 40 slid 1.6%, while the FTSE 100 in the UK fell 1.8%. Most Asian stocks fell on Friday as chipmaking stocks were pressured by doubts over the U.S. allowing more sales to China. Chinese markets fell further from multi-year highs as a second round of talks between President Xi Jinping and U.S. President Donald Trump concluded with no clear agreement. The Australian sharemarket fell on Friday as profit-taking in miners dragged the index lower at the end of a week in which investors were focused on the federal budget. The S&P/ASX 200 Index ended down 0.1 per cent, at 8630.80, with two of 11 sectors weaker. The benchmark was down 1.3 per cent for the week. Next week we get more results from the US, including NVIDA after the US market close on Wednesday, but the focus will likely be on the inflation pulse and fall-out from Trumps middle east expeditions. Like a carbuncle on an old friend, you simple cannot ignore it… markets be warned! http://www.martinnorth.com/ Details of our one to one service are here: https://digitalfinanceanalytics.com/blog/dfa-one-to-one/ Go to the Walk The World Universe at https://walktheworld.com.au/ Find more at https://digitalfinanceanalytics.com/blog/ where you can subscribe to our research alerts Please consider supporting our work via Patreon: https://www.patreon.com/DigitalFinanceAnalytics The full detailed set of post code data is available as a subscription service. Or make a one-off contribution to help cover our costs via PayPal at: https://www.paypal.me/MartinDFA We also can receive bitcoins at: 13zBL1oRib9VJu8Uc9zUGNhxKDBBgUpDN1 Please share this post to help to spread the word about the state of things.... Caveat Emptor! Note: this is NOT financial or property advice!! 🚨BEWARE OF SCAMMERS🚨 As there are accounts impersonating Walk The World in the comments on YouTube, note that our comments will have a distinguishable verified symbol. And remember that we will never message you asking you to give us money or talk to us on other platforms such as WhatsApp or Telegram