- In spite of Thursday’s stock market plunge, traditional and non-traditional hedges as orange and bitcoin were not immune from the sell off.
- Technology stocks led a steep sell off in the sector, with the Nasdaq hundred index down almost as 5.5 % in Thursday afternoon trades.
- Gold traded down almost as 1 %, while bitcoin fell 6 % on Thursday.
- Usually, investors appear to these non-traditional assets to provide shield during stock market sell-offs.
Technology stocks led the marketplace decline, with the Nasdaq 100 index down as much as 6 %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, seven %, in addition to 6 % respectively.
Meanwhile, the S&P 500 fell pretty much as four %, while the Dow Jones industrial average fell over 1,000 aspects for a loss of 3 %.
The steep technology driven sell off in the stock market spread to non-traditional and traditional portfolio hedges as yellow and bitcoin.
The two gold and bitcoin have just recently been bid in place by investors concerned about the expanding balance sheet of the US Fed and its the latest policy overhaul which will likely lead to higher levels of inflation.
Very last month, gold touched all-time highs during $US2,089 an ounce, while bitcoin reach a multi year high of $US12,473.
But that historical correlation did not play out on Thursday.
A classic asset class which did provide protection to investors from Thursday’s market sell off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up almost as 0.20 %.
For all of the talk with Wall Street analysts that the popular 60 40 investment profile that balances stocks & bonds is “dead,” it is alive and nicely today.