Wall Street’s major indexes closed the day in the red on Tuesday, alongside cryptocurrencies and precious metals such as gold and silver taking some percentage losses. The leading crypto asset bitcoin fell 5.87% under the $19K region, while the second largest crypto asset ethereum fell 8.7%. Gold nominal US dollar prices fell by 0.50 percent per troy ounce, down by 0.74 percent on September 6.
Stocks Lower, Crypto Economy Craters, Precious Metals Dip, Traders Await Fed’s Next Move
Tuesday was a bloody day for Wall Street traders, gold bugs and crypto fans as the markets posted heavy losses. Investors have begun to weigh in on an upcoming rate hike by the Federal Reserve, and benchmark U.S. Treasury yields rose to their highest level in two months. The Nasdaq, NYSE, S&P 500, and Dow Jones finished lower than expected on Tuesday after the US Labor Day holiday weekend.
Precious metals such as gold, silver and palladium also fell on Tuesday. Platinum and rhodium, however, jumped between 0.71% and 3.97% against the US dollar in the last 24 hours. The global crypto market capitalization of all existing crypto tokens lost 4.2% on the last day. As of this writing, on September 7, 2022, at 7:00 am (ET), the value of the crypto economy reached $940.10 billion.
Bitcoin (BTC) fell by 5.87% on Tuesday, falling below the $19K price range. Market strategists and traders are awaiting the next US Federal Reserve rate hike on September 21, which is estimated to be around 75 basis points. “You have to worry that all this fear is going to escalate at the central bank level,” Tom Di Galloma, managing director of Seaport Global Holdings in New York, said on Tuesday. “Inflation doesn’t go away and then you’ve got quantitative tightening that’s coming fast.”
Portfolio manager says US Treasury volatility and other market problems could trigger ‘sovereign default crisis’
In addition to the US central bank, Christine Lagarde, Luis de Guindos and the European Central Bank are expected to raise their benchmark lending rates significantly this week. Michael Gade, publisher and portfolio manager of the Lead-Lag Report, thinks the United States could be facing a sovereign debt crisis.
Gaid spoke with Kitco News anchor and producer David Lin, and explained the unusual situation in which U.S. Treasury yields are rising at an unprecedented rate. Gaid believes that if US Treasury yields are too high, it will make it harder for other countries to meet their debt obligations.
“When you have $170 trillion in outstanding debt and $30 trillion in visible debt…how can that not be inflationary? Gide asked Lee during the interview. “The only way to solve this is to pay the debt.”
The portfolio manager also noted that Wall Street has suffered its biggest monthly declines this year since the 2008 financial crisis. Skyrocketing Treasury yields, red-hot inflation, and a stock market crash could cause “multiple black swans,” Gayde said.
“The end result of all this is a kind of sovereign default crisis, which is a deflationary event, or the exact opposite, which is hyperinflation, which leads to conditions where something very bad is going to happen,” concluded the publisher of the Lead-Lag Report. .
Guided also said that the financial crisis could lead to a more authoritarian government than we have today. “Something bad can happen from a new leader that you don’t want to see lead,” Guide said.
What do you think about the global economy and the recent market crash affecting stocks, precious metals and cryptocurrencies? Let us know what you think about this in the comments section below.
Image creditsShutterstock, Pixabay, Wiki Commons, CNBC, Wolfstreet.com, Tradingview,
DisclaimerThis article is for informational purposes only. It is not an offer or solicitation to buy or sell, or a recommendation or endorsement of any products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the Company nor the Author shall be liable, directly or indirectly, for any damages or losses arising out of the use of or reliance on any content, goods or services referred to in this paragraph.