- Despite Thursday’s stock market plunge, traditional and non-traditional hedges as gold and bitcoin were not immune from the sell off.
- Engineering stocks led a steep sell off in the sector, with the Nasdaq hundred index down pretty much as 5.5 % in Thursday afternoon trades.
- Gold traded down pretty much as 1 %, while bitcoin fell 6 % on Thursday.
- Often, investors appear to these non-traditional assets to provide shelter during stock market sell-offs.
Technology stocks led the market decline, with the Nasdaq 100 index down almost as 6 %. Mega-cap tech winners like Apple, Microsoft, and Amazon fell eight %, seven %, in addition to six % respectively.
Meanwhile, the S&P 500 fell as much as 4 %, 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 traditional and non-traditional profile hedges like bitcoin and yellow.
Both gold and bitcoin have just recently been bid up by investors anxious about the expanding balance sheet of the US Fed and its recent policy overhaul that will probably result in increased levels of inflation.
Last month, gold touched all-time highs at $US2,089 an ounce, while bitcoin arrive at a multi-year high of $US12,473.
But that historical correlation didn’t play out on Thursday.
One particular traditional asset category that did offer protection to investors from Thursday’s advertise sell-off was bonds. The Bloomberg Barclay’s US Aggregate Bond Index traded up pretty much as 0.20 %.
For all the conversation among Wall Street analysts that the widely used 60-40 investment profile that balances stocks & bonds is actually “dead,” it is alive and nicely today.