Gold, bitcoin fail to preserve investors from Thursday’s stock market meltdown

  • Despite Thursday’s stock market plunge, traditional and non-traditional hedges like yellow as well as bitcoin were not immune from the sell off.
  • Technological innovation stocks led a steep sell-off in the sector, with the Nasdaq hundred index down as much as 5.5 % in Thursday afternoon trades.
  • Gold traded down almost as 1 %, while bitcoin fell six % on Thursday.
  • Usually, investors seem to these non traditional assets to provide shield during stock market sell offs.

____

Technology stocks led the market decline, with the Nasdaq 100 index down as much as six %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, seven %, and six % respectively.

Meanwhile, the S&P 500 fell as much as four %, while the Dow Jones industrial average fell over 1,000 steps for a loss of 3 %.

The high technology driven sell-off in the stock market spread to non-traditional and traditional collection hedges as bitcoin and orange.

Gold fell pretty much as 1 % to $US1,927.20 per ounce in Thursday trades, while bitcoin fell almost as 6 % to $US10,455.

Each of those gold and bitcoin have just recently been bid set up by investors anxious about the growing balance sheet of the US Fed and its recent policy overhaul that will likely lead to greater levels of inflation.

Last month, gold touched all-time highs during $US2,089 an ounce, while bitcoin arrive at a multi-year high of $US12,473.

Investors typically look to both gold and bitcoin as a hedge to inflation, deflation, and dropping stock prices because of their historically small correlation to equities.

But that historical correlation did not play out on Thursday.

A conventional asset class which did offer protection to investors from Thursday’s advertise sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up as much as 0.20 %.

For all the dialogue among Wall Street analysts that the popular 60 40 investment portfolio that balances stocks and bonds is actually “dead,” it is alive and nicely today.