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Key Takeaways:
- Fed Chairman Powell says inflation is no longer temporary, retires the word “transitory”
- Ethereum pushes to levels near its record high, Apple logs a new record amid a tech selloff
A Volatile Week with Powell-Fueled Jitters
The week saw increased volatility among asset classes in the wider financial markets. In other words, trading assets turned out to be more challenging as several important updates defined the past week.
First, Omicron fears largely divided market participants. While some argued the threat was nothing to worry about, others took a defensive approach to markets. Still, lingering uncertainty from the new Covid-19 variant pressured stocks and other risk assets such as cryptocurrency and commodities.
Also, Federal Reserve Chairman Jerome Powell appeared for a key hearing before the US Senate. In his speech, Mr. Powell said the US central bank is ready to roll back the monetary stimulus at a quicker pace to cool down rising prices. With this in mind, this November, the Fed began unwinding its $120bn-a-month asset program by $15bn a month.
Following his remarks, investors decreased their risk appetite and turned bearish on stocks. On that note, a jittery trading week saw major US indexes struggle to find direction.
Apple Jumps to a Fresh Record High
Some individual stocks, however, performed well even though the broader market was sliding. Apple stock, for example, pushed to a new-all-time this week as investors rushed into it to find safety. The increased buying momentum in Apple shares placed the company at the number one spot of the world’s biggest companies. More specifically, the iPhone maker, now worth $2.7 trillion, ousted Microsoft which is valued at $2.5 trillion.
Further, testifying to lawmakers, Mr. Powell said inflation could no longer be viewed as temporary. As a matter of fact, he suggested now was a good time to “retire the word transitory” when speaking about inflation.
While on the topic, eurozone inflation published this week showed consumer prices in the bloc rose 4.9% in November. In more detail, the surge in inflation was the biggest annual leap since the creation of the euro in 1999. On that front, the European Central Bank maintains its narrative that inflation is passing and will come down sometime in 2022.
Ethereum Rallies 20% Over the Week
In cryptocurrency, bitcoin and other digital assets maintained a mostly sideways trading momentum with the exception of Ether. In practice, Ether, the second-biggest coin, was perhaps the biggest winner among major tokens this week. The Ethereum cryptocurrency rallied more than 20% and climbed above $4,800 apiece.
While Ether gave up some of the gains later in the week, it still returned over 6% since Monday. It floated near $4,550 on Friday.