Stocks have plummeted, inflation is on the rise -China?

Thats the big question here this weekend: Why has stocked plummeted and with it Bitcoin, and why is inflation still skyrocketing after the grand re-opening of the world economies?

It is worth noting, however, that one major market has been left out of the global market’s grand re-opening since the first quarter of this year.

China is actually missing from this grand global re-opening, despite the fact that the Chinese economy is part of the global supply chain.

Facts about China:

1. China is the world’s largest manufacturing economy and goods exporter.
2. It was also the world’s fastest-growing consumer market and the world’s second-largest importer.
3. China is also the world’s largest consumer of many commodities, accounting for roughly half of global metal consumption.
4. Following 8.1 percent real GDP growth in 2021, growth is expected to slow to 5.0 percent in 2022.
5. Rising headwinds are reflected in the forecast: Domestic demand has slowed
6. Risks are firmly on the downside and include a stronger than expected global slowdown
7. A longer lasting commodity price shock, and more severe financial stress among property developers

As long as China does not fully reopen its borders, many countries will experience the shock of the instability caused by the broken supply chain and slow Chinese exports. And global growth will remain sluggish.

China’s expanding economy is an important source of global demand. Its economic rebalancing, exacerbated with the pandemic, will relaunch fresh opportunities for manufacturing exporters. Potentially, it will reduce commodity demand in the medium term and long term, thus bringing hyperinflation under control.

Through trade, investment, and ideas, China is exerting increasing influence on other developing economies. This has not changed with the COVID-19 pandemic.

It has only been temporarily halted, but once China defeats the ogre in Shanghai and Beijing, where the virus is still rife, she will help relieve global pressure on the already stressed supply chain.

Facts on China’s COVID-19 battle:

The global economic environment has deteriorated significantly as a result of the Ukraine conflict. But what is not being said is the weight of China on the global economic slowdown.

1. Furthermore, COVID incursions have become more common and widespread.
2. Since the end of the national lockdown in March 2020, China has been experiencing the largest COVID wave
3. China also remains at risk of re-escalating COVID outbreaks, which could lead to significant economic disruption
4. In a downside scenario, economic growth could slow to 4.0 percent in 2022 due to the pandemic in 2022.

Yet, China’s return to the global market in full will not alone help fix inflation for the West. The question at the beginning of the article is about the globe and also about the Western economies

Stock market

Despite the market crash, America has by far the world’s strongest economy and stock market. This has not changed despite the pandemic nor the hyperinflation pressures.

But the country is facing tough times. Look what’s expected of the market this week:

• Dow Jones, S&P 500, and Nasdaq 100 have had their worst two weeks since 2020. This week is not looking too good.

• Traders are becoming more concerned about a recession as the Fed battles. CPI.

• Next week’s data will provide more information on growth rather than inflation.

On the day of the Fed meeting (announcing a rate hike of 0.75%), Wall Street rallied only to tumble the next day when disappointing housing data was released.

Markets will be closely monitoring economic data in the coming months to gauge the severity of the recession, says DailyFX.

Bloomberg data puts the odds of a recession at 31.5 percent next year, up from 20 percent previously.

BITCOIN

Bitcoin rallied during the weekend, rising from its lowest in months ($17k plus) to 20k+ and has in the early morning dropped to 19,803.45 after 9 am.

Traders profited while holders saw a small rise in their portfolio.

However, experts are warning.

Bitcoin has broken a 12-day losing streak, clawing its way back above $20,000 and leading the cryptocurrency market in a quick turnaround following a record-breaking string of declines.

The world’s largest cryptocurrency rose 16% on Sunday, recouping losses from a precipitous drop on Saturday that sent the token as low as $17,599.

As of 5 p.m. in New York, Bitcoin was worth around $20,400. Ether, which fell as low as $881 during the selloff, rose 26 percent to $1,140, while alternative coins ranging from Avalanche to Solana also saw gains.

In these circumstance, it would be good to buy BTC or ETH in particular when they are below 20k and 1k. Watch out!