(Bloomberg) – Big Tech led shares lower again on the final trading day of 2022 as financial markets wrap up their worst year in more than a decade for global stocks and bonds.
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The S&P 500 fell, taking the shine off the rally on Thursday, this month’s best day, and leaving it down almost 20% in 2022. The tech-heavy Nasdaq 100 fell the most among benchmarks on Friday, threatening to lose a third of its value this year as tech stocks proved some of the most vulnerable to rising interest rates.
Government bonds fell, pushing yields higher across the board. The dollar continued to fall against its key peers, with the Bloomberg Dollar Spot Index heading for its lowest level since June. The yen rallied even after the Bank of Japan announced an unprecedented third day of unscheduled asset purchases.
This week’s losses have dashed hopes of a rally to close out 2022 – a year in which inflation reasserted itself and wiped out a fifth of the value of global equities, the worst since the financial crisis. Bonds lost 16% of their value, the biggest drop for a leading metric since at least 1990, as central banks rushed to stem rising consumer prices by raising interest rates around the world.
“We’ve never seen a market environment like this, where both stocks and bonds have fallen at the same time,” said Art Hogan, chief market strategist at B. Riley Wealth. “The good news is that we will soon be looking at the year in the rear-view mirror. The bad news is that 2023 could be a bumpy ride, at least for the first few months. Weaker economic trends are likely to emerge into 2023 as the Fed fights inflation, but a mild recession could help set stocks up for a better second half.”
The story goes on
Stocks fell further on Friday and yields climbed to session highs after a report showed that business activity in Chicago rose more-than-expected in December, suggesting a resilient economy can withstand more rate hikes.
Concerns about the spread of Covid-19 that surfaced this week are still weighing on markets. The European Commission has urged EU member states to review Covid testing and sequencing procedures and to consider reopening amid growing concerns about the spread of the virus from China.
Elsewhere, emerging market stocks were set for their first weekly gain in three weeks, although the benchmark index remains on course for a more than 20% decline in 2022.
Oil declined, adding to a three-day streak of declines on worries about rising crude stocks and concerns that rising Covid-19 infections in China would slow demand at one of the world’s top oil importers. Bitcoin ends the year weak, slipping about 0.8% to bring its decline to more than 64% in 2022.
Some of the key movements in the markets:
stocks
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The S&P 500 was down 0.8% as of 11 a.m. New York time
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The Nasdaq 100 fell 1%
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The Dow Jones Industrial Average fell 0.7%
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The Stoxx Europe 600 fell 1%
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The MSCI World Index fell 0.6%
currencies
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The Bloomberg Dollar Spot Index fell 0.1%
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The euro rose 0.1% to $1.0676
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The British pound fell 0.2% to $1.2031
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The Japanese yen rose 0.8% to 131.93 per dollar
cryptocurrencies
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Bitcoin fell 0.3% to $16,550.51
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Ether was little changed at $1,194.41
Bind
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The 10-year government bond yield rose six basis points to 3.87%
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The 10-year German government bond yield rose 10 basis points to 2.54%
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The 10-year UK government bond yield rose one basis point to 3.67%
raw materials
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West Texas Intermediate crude was up 0.5% to $78.80 a barrel
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Gold futures fell 0.2% to $1,822.80 an ounce
This story was created with the support of Bloomberg Automation.
–Assisted by Jan-Patrick Barnert, Richard Henderson, Vildana Hajric and Robert Brand.
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