NEW YORK, New York -- U.S. stocks plunged after fears of more aggressive Fed tightening to combat inflation gripped markets. The euro dropped below parity on Monday, a sign that the European economy is threatening by major gas shortages in Europe.
Some people were not very bearish.
We maintain that inflation will resolve on its own as distortions fade and likely drive a Fed pivot, while a stronger H 2 recovery in China should provide support for the global cycle. In addition to the low investor positioning, CNBC quoted JPMorgan global strategist Marko Kolanovic as saying in a note to clients on Monday that this creates a positive environment for cyclical assets.
The variable that matters the most is positioning, because of the core belief that there will be no global recession and that inflation will be less. Kolanovic said that positioning is still very low for both systematic and discretionary funds. It is now in the 10th percentile.
The Nasdaq Composite fell by 323.64 points or 2.55 percent to 12,381. The Dow Jones industrials plummeted 643.13 points or 1.91 percent to 33,063. The Standard and Poor's 500 dropped 90.49 points or 2.14 percent to 4,137. The U.S. dollar was down Monday as buyers pushed all major currencies lower. The euro fell below parity. The British pound fell to 1.1762. The Japanese yen was weakened to 137.46. The Swiss franc was down to 0.9646.
The Canadian dollar fell to 1.3046. The Australian dollar was steady at a crucial trade point, around 0.6876. The New Zealand dollar fell to 0.6171.
The German Dax fell 2.30 percent on overseas equity markets. The Paris-based CAC 40 lost 1.80 percent. The FTSE 100 was down 0.22 percent in London.
In Tokyo, the Nikkei 225 lost 135.83 points or 0.47 percent to 28,794. The Australian All Ordinaries fell by 71.50 points or 0.97 percent to 7,287. In New Zealand, the S&P NZX 50 advanced by 79.14 points or 0.68 percent to 11,763. In Hong Kong, the Hang Seng lost 116.05 points or 0.59 percent to 19,656.