In just a month, the bull-market rally has come to a screeching halt as investors face the reality of “higher for longer” interest rates globally. The sell-off in global stocks and bonds has gained momentum, leaving market watchers eager for insights at the upcoming Jackson Hole summit. Technology stocks, in particular, have been hard-hit, with the FANG+ Index falling into correction territory. These high-growth tech stocks are prone to sensitivity when interest rates and bond yields rise. Previously, they surged as investors believed the Fed would adopt a more dovish rates policy. However, the recent decline in these stocks suggests a shift in sentiment. Just a month ago, Apple, Nvidia, Meta, and Microsoft were being hailed as the driving forces behind the S&P 500 gains this year. Now, four of these seven stocks have seen a drop of at least 10% since July. Tesla, in particular, has fallen over 25%, placing it in bear territory. Rising bond yields have put investors on edge, leading to a sell-off not only in stocks but also in cryptocurrencies like Bitcoin and Ethereum. China’s economic woes further compound the market’s uncertainty, with the Hang Seng Index falling into a bear market and analysts lowering growth forecasts. Amidst all this, Evergrande, a Chinese property giant, has filed for bankruptcy in the U.S., posing a threat to Chinese growth. On the IPO front, both Instacart and Arm are making preparations, with the former planning for an IPO on Nasdaq, while the latter secures underwriters for a potentially blockbuster IPO. Mortgage rates have hit a 21-year high, further straining the housing market. Finally, Hurricane Hilary is set to make landfall in California, triggering flood alerts. On another note, President Biden’s efforts to counter China’s dominance in the steel sector may face obstacles, as a bidding war for U.S. Steel could arise. While the current bid has been rejected, concerns over consolidation and China’s role in Indonesia’s nickel industry have implications for the global economy and the Biden administration’s energy transition plans. Spotify is exploring ways to increase profits by redirecting listeners away from less lucrative podcasts. The recent devastating wildfires in Maui have prompted scrutiny of Hawaiian Electric, with its shares dropping significantly and credit ratings firms downgrading the company. Questions loom over potential liabilities and the possibility of bankruptcy, similar to what Pacific Gas and Electric faced. Evidence, such as videos and data from Whisker Labs, suggests that power lines may have sparked the fires.
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