Gold, bitcoin fail to preserve investors from Thursday’s stock market meltdown

  • In spite of Thursday’s stock market plunge, non-traditional and traditional hedges as yellow as well as bitcoin weren’t immune from the sell-off.
  • Engineering stocks led a steep sell off of the sector, with the Nasdaq 100 index down as much as 5.5 % in Thursday afternoon trades.
  • Gold traded down almost as one %, while bitcoin fell six % on Thursday.
  • Typically, investors seem to these non traditional assets to offer shelter during stock market sell-offs.

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Engineering stocks led the market decline, with the Nasdaq hundred index down almost as 6 %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell 8 %, seven %, in addition to 6 % respectively.

Meanwhile, the S&P 500 fell almost as 4 %, while the Dow Jones industrial average fell more than 1,000 aspects for a loss of three %.

The high technology-driven sell off in the stock market spread to traditional and non-traditional profile hedges as yellow and bitcoin.

Gold fell almost as one % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell as much as six % to $US10,455.

Each of those gold and bitcoin have just recently been bid set up by investors worried about the growing balance sheet of the US Fed and its recent policy overhaul that will probably lead to higher levels of inflation.

Very last month, gold touched all time highs during $US2,089 an ounce, while bitcoin arrive at a multi-year high of $US12,473.

Investors typically look to both gold as well as bitcoin as a hedge to inflation, deflation, and dropping stock prices owing to their historically small correlation to equities.

But that historical correlation didn’t play out on Thursday.

A conventional asset class which did give protection to investors from Thursday’s market sell off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up as much as 0.20 %.

For all the conversation with Wall Street analysts that the favorite 60 40 investment portfolio which balances stocks and bonds is actually “dead,” it is alive and perfectly today.

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