Equities Trying to Recover from Tuesday's Slamdown
27 April 2022
US equity indices were slammed hard on Tuesday, pushing indices several percent lower.
Tesla stock plummeted 13% on fears that CEO Elon Musk would have to sell a portion of his share to fund his acquisition of Twitter. Twitter shares also declined yesterday, along with the broad market.
However, Wednesday is seeing some efforts to buy the dip, as indices are up notably, but overall, the medium-term outlook is not looking bright.
Concerns that China's insistence on strong COVID limits will impair local and global economies have weighed on equity market indices this week. This comes on the heels of reports that the epidemic in Shanghai, which is already in its fourth week, has traveled to other major Chinese cities, including Beijing.
Additionally, reports that Russia's Gazprom would start suspending gas supplies to Poland and through Bulgaria as early as April 27 did little to improve attitude late in the day. As sanctions over its incursion on Ukraine mount, Russia is demanding ruble payments for its gas, something most western nations are unwilling to cope with. Oil returned above 100 USD after the news.
Later today, ECB President Christine Lagarde is due to speak at the Manager Magazine's Top 100 women in Hamburg's German business event. However, this speech might not cause any significant market movements.
In the FX, the USD index has pushed above 102, the highest since March 2020, which in turn led to the EURUSD pair near 1.06, the lowest level since April 2017. The GBPUSD pair also cratered as traders highlighted falling BoE hiking expectations and uncertainty about UK government borrowing statistics for the 2021/22 fiscal year as factors impacting the Pound. Thus, sterling fell sharply below 1.26 for the first time since July 2020.