(Bloomberg) — U.S. stocks fell on the last trading day of 2022 as financial markets close out the worst year in more than a decade for global stocks and bonds.
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The S&P 500 fell, taking Thursday’s rally, which was the best day of the month, off the shine and losing almost 20% in 2022. The technology-heavy Nasdaq 100 fell the most below benchmarks on Friday, poised to lose a third of its value this year as technology stocks emerged as one of the most vulnerable to rising interest rates.
Treasuries fell, driving yields higher across the board. The dollar fell further against major peers, with the Bloomberg Dollar Spot Index heading for its lowest level since June. The yen even rose after the Bank of Japan unveiled an unprecedented third day of unplanned bond purchases.
Stocks continued to take losses and yields climbed to session highs after a report showed business activity in Chicago increased more than expected in December, suggesting a robust economy can weather more rate hikes.
Losses this week dashed hopes of a rally to close out 2022 – a year in which inflation reasserted itself and wiped out a fifth in value of global equities, the worst streak since the financial crisis. Bonds lost 16% in value, the largest drop since at least 1990 for one major measure, as central banks scrambled to curb rising consumer prices by raising interest rates around the world.
“We have never seen a market environment like this where both stocks and bonds fell at the same time,” said Art Hogan, chief market strategist at B. Riley Wealth. “The good news is that we will soon be putting the year in the rearview 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 form heading into 2023 as the Fed fights inflation, but a mild recession could help build inventories for a better second half of the year.”
Concerns about the spread of Covid-19 are still weighing on markets. The European Commission has asked EU member states to review and consider scaling up testing and sequencing procedures for Covid amid heightened concerns about the spread of the virus from China.
Elsewhere, emerging market equities were poised for their first weekly gain in three weeks, though the benchmark index remains on track for a fall of more than 20% in 2022.
Oil fell, adding to a three-day streak of declines amid concerns over rising crude inventories and concerns that rising Covid-19 infections in China would slow demand at one of the world’s largest oil importers. Bitcoin ends the year limply, dropping about 0.8% to bring its decline to over 64% in 2022.
Some of the major movements in markets:
The S&P 500 was down 0.9% as of 10:10 a.m. New York time
The Nasdaq 100 fell 1.3%
The Dow Jones Industrial Average fell 0.8%
The Stoxx Europe 600 fell 0.9%
The MSCI World index fell 0.6%
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.2% to $1.0679
The British pound was little changed at $1.2064
The Japanese yen rose 0.8% to 131.90 per dollar
Bitcoin fell 1% to $16,420.39
Ether fell 0.6% to $1,187.8
10-year Treasury yields rose eight basis points to 3.89%
German 10-year yields rose 10 basis points to 2.54%
UK 10-year yields rose by one basis point to 3.67%
This story was created with the help of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert, Richard Henderson, Vildana Hajric, and Robert Brand.
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