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Bitcoin Surges, Dollar Jumps, Stocks Drop On Rate Hike Fears

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Bitcoin has settled at around $24k – that’s only 4.39% from its all-time high of 25.2K! With 24hr trading volumes topping 39 billion and with an impressive 11%.74 increase since last weeks low point; it looks like BTC still hasn’t hit peak potential yet!

It’s the highest surge since last August at $24,436.39 while worldwide inflation was given a boost by an unexpected jump of 0.7% in producer prices for January according to economic forecasts. 

Bitcoin Price Chart (USD)

Investor sentiment is taking a hit as the U.S economy continues to soar and the Federal Reserve isn’t backing down on its hard-line approach.

On Thursday, U.S stocks dropped as heavyweights like Microsoft, Disney and Tesla all experienced considerable losses – but in the Asia-Pacific region things were looking up with Japan’s Nikkei 225 rising 0.71%. 

It wasn’t good news however for electric car maker Tesla who have been forced into recalling 362k vehicles due new driver assistance software which may lead to crashes; 

The Security and Exchange Commission has even filed charges against Terraform Lab following further reports on this issue!

Despite an overall strong U.S. economy, there are still some underlying issues that indicate we may be headed for sticky times ahead: 

Factors That Can Affect The Exchange Rate In 2023

PPI Soars

Unemployment has dropped to record lows and consumer spending is up despite higher prices.  However it looks like inflation isn’t going anywhere anytime soon — the producer price index just had its biggest jump in 8 months! 

The producer price index (PPI) data roared into January, with a 0.7% month-on-month figure that beat expectations of 0.4%. Even better news was the 6.0% annual print – smashing forecasts of 5.4%, and showing healthy inflationary pressure across the economy! 

Core PPI ex-food & energy also saw an impressive jump to +0.5%, from previous estimates at 0.

Treasury yields had a strong week, with the back end in particular seeing substantial gains. This pushed the 2s 10s yield differential to its lowest level since 1980 – an impressive event signalling positive movement for investors. 

The dollar responded well too, jumping six-week highs across multiple currency pairs and indexes like DXY!

With this unusual combination of economic indicators, only time will tell what’s coming our way down the line.

Produce Price Index

Dollar Jumps

The US Dollar soared overnight when two Fed board members spoke in favor of making a big 50 basis point hike to the target rate. This hawkish push from Loretta Mester and James Bullard wasn’t new – they’ve been vocal before about wanting this increase. 

But now, with signs that business inflation is picking up steam again, it looks like they could finally get their way! The markets might be expecting smaller hikes at first but expect bigger news soon.

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Wall Street Reactions

Markets have recently been welcoming higher-than-expected inflation reports with open arms, showing that a new normal can exist where economic growth flourishes alongside prices rising faster than usual.

Markets had been holding steady until yesterday, when they finally saw a significant drop. The Dow declined over 1%, the S&P 500 dropped close to 1 and half percent, while Nasdaq tumbled closer to 2%. It was an uneasy day for investors as stocks continued their downward trend.

DoorDash is soaring to new heights! Shares jumped 7% after the online food delivery platform reported record-breaking revenues, totalling $1.82 billion – above analyst expectations of $1.77 billion and even beating out their own guidance. 

Although losses were greater than predicted at a per share loss of $1.65 compared to only 68 cents estimated by analysts, that didn’t stop DoorDash from reaching this milestone achievement!

Texas Roadhouse experienced a rough ride in Thursday’s trading session, with their shares dropping nearly 5% from the previous 52-week high. 

Even though they reported fourth quarter earnings of 89 cents per share and revenue totaling $1 billion – both figures coming up short when compared to analysts’ estimates – the restaurant chain blamed commodity inflation and increased wages for falling below expectations.

DraftKings kicked off 2021 in style as its strong fourth-quarter earnings and revenue beat analyst expectations. The sports betting giant gained a 6% boost, posting an impressive $855 million in total revenues – well over the estimated figure of $800 million!

Applied Materials surged ahead of the pack, with their stock adding 2% after delivering earnings and revenue that exceeded expectations. Despite providing an optimistic outlook for the future, they were forced to lower guidance due to continued supply chain issues—proving themselves a reliable leader regardless of difficult circumstances!

Moderna took a hit in the markets recently, as investors responded to its influenza vaccine candidate’s lukewarm clinical trial results. Dropping 6.7%, shareholders are hoping for better news from this biotechnology firm soon!

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Author

  • Phyllis Wangui

    Phyllis Wangui is a Financial Analyst and News Editor with qualifications in accounting and economics. She has over 20 years of banking and accounting experience, during which she has gained extensive knowledge of the forex, stock news, stock market, forex analysis, cryptos and foreign exchange industries. Phyllis is an avid commentator on these topics and loves to share her insights with others through financial publications and social media platforms.