Weekly Digest: U.S. Inflation, Stocks, Crypto Crash


3 minutes read

May 12, 2022

US inflation staying at a 40-year high as shown in a picture of a compass arrow pointing at inflation

12/05/22: U.S. inflation stays at a 40-year high, defying expectations of a bigger drop, crypto and stocks fall, reacting to the U.S. inflation data. And more.

Investment news

Inflation test: U.S. inflation hit 8.3% in April compared to last year, remaining near a 40-year high. (CNBC)

Excluding volatile food and energy prices, core CPI rose 6.2%, compared to expectations for a 6% increase, casting doubt on the notion that inflation had peaked in March.

Read our SPOTLIGHT to find out how rising inflation can impact the gold price.

The gold price fell on Thursday, dragging other precious metals down with it, as the U.S. dollar reached a new two-decade high on renewed hopes that the Fed will stick to its aggressive rate-hike schedule.

Here’s how the prices of gold, silver, platinum, and palladium have changed over the past week: 

a table showing how the prices of precious metals have changed over the week

The U.S. dollar reached a two-decade high Thursday after U.S. inflation slowed less than expected, keeping the Fed on track to tighten policy aggressively. (Reuters)

The safe-haven greenback also gained support as global equities fell on investor concerns that central banks are falling behind in their efforts to control rising consumer prices.

Wall Street stocks, treasury yield fell on Wednesday after U.S. inflation data, while oil prices rallied and investors worried about the potential for an economic slowdown. (CNBC)

"This is all about concern about a recession. The inflation numbers we got this morning were not good, worse than expectations. There's high food prices and increasing concern inflation numbers are going to be sticky on the high side," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder.

bitcoin and other cryptocurrencies' crash driven by the latest US inflation data represented by a picture of a bear pushing the bitcoin sign down the red hill

💣Crypto crash: In reaction to the U.S. inflation data, Bitcoin dropped below the $27,000, the lowest level in 16 months, as worried investors rushed to exit risk assets including crypto. (CNBC)

According to Coin Metrics, the price of bitcoin was down 8.76% at $26,848.20 as of 1:47 a.m. ET Thursday. Ether dropped more than 13% to $1,832.33.

Read our SPOTLIGHT to find out why cryptocurrencies are so volatile.

🍏Apple is no longer the most valuable company in the world. (CNBC)

Oil giant Saudi Aramco is now the world’s most valuable company.

On Wednesday, Aramco's market capitalization was just under $2.43 trillion, according to FactSet. Apple, which fell more than 5% during trading in the U.S. on Wednesday, is now valued at $2.37 trillion.


Inflation disappointment: The Fed is failing to prevent sticky prices from sinking even deeper. Markets are falling as the magnitude of the inflation challenge grows bigger. (Bloomberg Opinion)

“The measures that were urged last year as evidence by the members of what used to be called “Team Transitory,” arguing that inflation would soon decline, are actually getting worse,” Bloomberg’s John Authers writes.

What else is happening

Finland said Thursday it intends to apply for NATO membership as soon as possible, as Russia’s war in Ukraine reshapes European security. (Reuters)

According to several diplomats and officials, NATO allies expect Finland and Sweden to be granted membership quickly, allowing for an increased troop presence in the Nordic region during the one-year ratification period.

Finland may join NATO soon amid the ongoing war in Ukraine launched by Russia on February 24

Russia’s top official warns the West over the risk of a direct conflict with NATO. (Reuters)

"NATO countries pumping weapons into Ukraine, training troops to use Western equipment, sending in mercenaries and the exercises of Alliance countries near our borders increase the likelihood of a direct and open conflict between NATO and Russia," Medvedev said.

And finally…

Hydrated minerals discovered by China's robotic rover on Mars in a vast basin thought to be the site of an ancient ocean indicate that water was present on the planet's surface for a longer period of time than previously thought, according to Chinese scientists. (Reuters)

scientists found water was present on the surface of Mars for longer than previously thought

Signs of water were detected in sampled minerals from just 700 million years ago, according to an analysis of data sent back by the rover, Zhurong, the scientists said in a paper published on Wednesday in the journal Science Advances.


See you next week!


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