RE: The whole market is down5 Aug 2024 08:24
"The markets are in meltdown and itโs a sea of red across the world. There are a lot of moving parts, but this is the essence of things: a looming slowdown in the US economy has cast doubts about global economic growth. The move has triggered a sell-off in the US Dollar and a rally in the Yen, the latter of which was boosted by the BOJโs decision to tighten policy last week and a subsequent short-squeeze.
The rapid move in the Yen is putting downward pressure on Japanese equities, but itโs also driving an unwind of a major carry tradeโinvestors had leveraged up by borrowing in Yen to buy other assets, chiefly US tech stocks. We are basically seeing a mass deleveraging as investors sell assets to fund their losses.
The rapidity of the move has caught a lot of investors off guard; thereโs a lot of panic selling now, which is what causes these non-linear reactions in asset prices to pretty straightforward fundamental dynamics."