(Bloomberg) – U.S. stocks fell on the last trading day of 2022 as financial markets closed the worst year in more than a decade for global stocks and bonds.
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The S&P 500 fell, taking away the shine from Thursday’s rally that was this month’s best day and leaving it down nearly 20% in 2022. The tech-heavy Nasdaq 100 fell the most among benchmarks Friday, on the verge of losing a third of its value. this year as tech stocks have emerged as some of the most vulnerable to rising rates.
Treasuries fell, driving up yields across the board. The dollar extended its declines against its major peers, with the Bloomberg Dollar Spot Index heading for its lowest level since June. The yen rallied even after the Bank of Japan unveiled an unprecedented third day of unanticipated bond buying.
Stocks extended losses and yields hit session highs after a report showed Chicago business activity rose more than expected in December, suggesting a robust economy can withstand more price hikes. rate.
This week’s losses dashed hopes of a rally to close out 2022 – a year in which inflation reasserted itself to wipe out a fifth of the value of global stocks, the worst since the financial crisis. Bonds lost 16% of their value, the biggest drop since at least 1990 by any significant measure, as central banks rushed to slow rising consumer prices by raising interest rates around the world entire.
“We’ve never seen a market environment like this where stocks and bonds have gone down simultaneously,” said Art Hogan, chief market strategist at B. Riley Wealth. “The good news is that we will soon put the year in the rearview mirror. The bad news is that 2023 could be a bumpy ride, at least for the first few months. Weaker economic trends will likely form heading into 2023 as the Fed battles inflation, but a mild recession could help set stocks up for a better second half of the year.
Concern about the spread of Covid-19 continues to weigh on the markets. The European Commission has asked EU member states to review Covid testing and sequencing procedures and consider scaling them up amid growing concerns about the spread of the virus from China.
Elsewhere, emerging market stocks were forecast for the first in three weekly advances, although the benchmark remains on track for a more than 20% drop in 2022.
Oil tumbled, adding to a three-day streak of declines on concerns over a rise in crude inventories and fears that rising Covid-19 infections in China could dampen demand for one of the world’s major oil importers. Bitcoin ends the year weakly, slipping around 0.8% to take its decline in 2022 to over 64%.
Some of the major movements in the markets:
The S&P 500 fell 0.9% at 10:10 a.m. PT
The Nasdaq 100 fell 1.3%
The Dow Jones Industrial Average fell 0.8%
The Stoxx Europe 600 fell 0.9%
The MSCI World index fell 0.6%
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.2% to $1.0679
The pound was little changed at $1.2064
The Japanese yen rose 0.8% to 131.90 per dollar
Bitcoin fell 1% to $16,420.39
Ether fell 0.6% to $1,187.8
The yield on 10-year Treasury bills rose eight basis points to 3.89%
The German 10-year rate rose 10 basis points to 2.54%
The UK 10-year yield rose one basis point to 3.67%
This story was produced with assistance from Bloomberg Automation.
–With help from Jan-Patrick Barnert, Richard Henderson, Vildana Hajric and Robert Brand.
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