Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Opening Bell: Risk-Off Returns With Louder Recession Warnings; Bitcoin Falters

By Investing.com (Pinchas Cohen/Investing.com)Market OverviewJun 22, 2022 08:44AM ET
www.investing.com/analysis/opening-bell-riskoff-returns-with-louder-recession-warnings-bitcoin-falters-200626122
Opening Bell: Risk-Off Returns With Louder Recession Warnings; Bitcoin Falters
By Investing.com (Pinchas Cohen/Investing.com)   |  Jun 22, 2022 08:44AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
  • Major investment banks and Tesla CEO predict recession
  • Yen touches all-time low
  • Dollar recovers

Key Events

As more market heavy hitters warn of an impending recession, futures on the Dow Jones, S&P 500, NASDAQ 100, and Russell 2000 slumped on Wednesday along with global stocks. Global investment banks, Morgan Stanley and Goldman Sachs forecast further stock market losses while Tesla (NASDAQ:TSLA) CEO, Elon Musk warned a recession is more likely than not.

Treasury yields tumbled as investors bought safe-haven assets.

Global Financial Affairs

US futures were deep in the red and have been falling since the end of regular trading on Tuesday, suggesting the equity market will end its two-day rally.

Contracts on the NASDAQ 100 and the Russell 2000 led the slide. Technology and smaller firms are the first to sell off as inflation and interest rates rise. The tech sector's valuation had already maxed out but small companies don't have the flexibility and resources larger companies have to navigate the increasingly challenging economic climate.

From a technical perspective, we think the S&P has room for an upward correction within the downtrend.

S&P 500 Daily
S&P 500 Daily

Futures have bounced from the bottom of a Falling Channel, which means the preceding selloff may have been exaggerated, attracting dip buyers, who could push up prices back toward the channel top. That, however, is not guaranteed, and falling channels could steepen by breaking the floor of a primary falling channel. However, even if the price will rebound toward the channel top, it doesn't mean it will happen today.

The STOXX 600 Index plunged to its lowest since Feb. 1, 2021, erasing three days of gains within the first hour of trading. Cheaper valuations following the sharp selloff lured in dip buyers. Miners and energy underperformed amid slumping commodities.

The FTSE 100 opened significantly lower after data showed that UK inflation hit a new four-decade high due to surging food and energy costs. Even a weakening pound sterling didn't help the export-heavy index. The FTSE 350 Industrial Metals & Mining underperformed, falling 4%, as the strengthening US dollar and recession concerns weighed on industrial metals.

FTSE 350 Industrial Metals & Mining Daily
FTSE 350 Industrial Metals & Mining Daily

The index fell to its lowest since Jan. 31, gearing to complete an H&S top.

Asian shares were red across the board as they ignored yesterday's rally on Wall Street and joined US futures in a selloff.

The yen briefly fell to a record low.

South Korea's KOSPI plummeted 2.74% to a fresh 19-month low. Hong Kong's Hang Seng plunged 2.6% on a report that China may ban third-party online platforms from offering medicine—underperforming the region.

US shares extended a rebound on Tuesday with dip buyers seeking bargains after last week's crash wiped out almost $2 trillion in value from the S&P 500.

The NASDAQ 100 outperformed, jumping 2.49% followed closely by the S&P 500 with a 2.45% gain, led by the Energy and Consumer Discretionary sectors.

Shares in beauty behemoth, Revlon (NYSE:REV) jumped a massive 62% after its Chapter 11 bankruptcy filing. Shares in snack and convenience food giant, Kellogg Company (NYSE:K) rose 2% on plans to break the company into three entities.

Kellog Daily
Kellog Daily

Despite yesterday's gains, the stock gave up more than a 5% rally, as the shoulders of an H&S top provided resistance. A break below $66 could have the price retest March lows.

Treasury yields on the 10-year note fell as investors again rotated into havens.

The dollar rose, pushing gold down.

Gold Daily
Gold Daily

The yellow metal is falling toward the bottom of a new Rising Channel as the price squeezes between the long-term and short-term downtrend.

Bitcoin fell toward $20,000, again, perhaps developing a continuation pattern.

Bitcoin Daily
Bitcoin Daily

The digital currency has been ranging in a pennant formation, bearish after the preceding sharp selloff. A downside breakout would signal a resumption of the crash. According to the principles of technical analysis, the move before the pennant is expected to repeat on the downside, implying a target of around $5K.

Oil extended a selloff, falling below $105 for the first time since May 12.

Oil Daily
Oil Daily

The price bounced off the uptrend line since the Dec. 2 low.

Up Ahead

Market Moves

Stocks

  • The MSCI Asia Pacific Index fell 1.7%
  • The MSCI Emerging Markets Index fell 2.2%

Currencies

Bonds

  • Germany's 10-year yield fell to 1.66%
  • Britain's 10-year yield fell to 2.55%

Commodities

Opening Bell: Risk-Off Returns With Louder Recession Warnings; Bitcoin Falters
 

Related Articles

Opening Bell: Risk-Off Returns With Louder Recession Warnings; Bitcoin Falters

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
JJ JJ
JJ JJ Jun 24, 2022 2:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Cryptocurrencies (actually no currencies at all) will be worthless!
Mba Amarachi
Mba Amarachi Jun 24, 2022 2:00AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
hello
Viren Patel
Viren Patel Jun 22, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
10k..5k.. bitcoin.. all over the place.. if you keep throwing out more numbers maybe you guess right... as for the narket.. you or anyone else knows nothing except chart drawing with a crayon...
Taru Nam
Taru Nam Jun 22, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Completely agree. Look at the 5th paragraph starting ...Futures have bounced....how many qualifications are included in this 'analysis'...like...maybe, perhaps, however, not today (meaning sometime in future, oh really!).
Pinchas Cohen
Pinchas Cohen Jun 22, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
I provided a technical explanation of how the target is derived. This is a new pattern and hence I did not provide this specific target before it emerged. Your comment about the crayon suggests that perhaps you don't understand what these lines represent and how they work. Happy trading!
Pinchas Cohen
Pinchas Cohen Jun 22, 2022 7:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Taru Nam  Yes, because we're in the business of "analysis," not "fortune-telling."
Arda Erkoçak
Arda Erkoçak Jun 22, 2022 7:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Pinchas, you put Kellogg stock in BTC part by mistake. Other than that thanks for good analysis always
Pinchas Cohen
Pinchas Cohen Jun 22, 2022 7:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Thanks, Arda!
Mba Amarachi
Mba Amarachi Jun 22, 2022 7:37AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
thanks
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email