THE SQUIZ
The ASX 200 – the index that measures the value of our biggest listed companies – fell by 3.55% yesterday, making it the worst single-day market fall since May 2020. The losses were not contained to one sector – there was red across the board as companies from technology to the banks to mining all suffered. It was a torrid day – the Aussie share market dived more than 5% in the 20 minutes after opening, but it pulled back a bit over the day to lose $87.5 billion. That followed tough trading sessions in the US, UK, Europe and Asia that saw many billions of dollars wiped from the value of the world’s biggest companies and their shareholders.

WHAT’S THAT ABOUT?
It has to do with escalating fears that inflation will continue to rise and economic growth will stall. It started with the US Federal Reserve announcing on Friday that it will aggressively raise interest rates starting tonight following a new/high inflation reading of 8.6%. That saw analysts tip that the US will go into recession next year, which led to the S&P 500 (an index tracking 500 of America’s leading companies) falling into a bear market. That’s a fancy way of saying that a stock market has fallen 20% or more from its most recent high (and, in case you’re wondering, a bull market is when it rises 20% from recent bear market lows and heads towards record highs). Long story short, the US is the world’s largest economy, and when it falters – or if there’s speculation it’s heading towards tough times – the world follows. Here in Australia, Reserve Bank Governor Philip Lowe says we’re heading for inflation of 7% and rising interest rates over the coming months.

LUCKY I PUT EVERYTHING INTO CRYPTOCURRENCY…
Umm you might want to check your balance because the values of the biggest cryptocurrencies are at 10-month lows… The panic gripping traditional markets has extended to this new one, leading the biggest crypto platforms to restrict activity. Bitcoin is a good example as the world’s most valuable cryptocurrency – it finished yesterday at US$22,400, which is significantly below its all-time high in November last year of US$69,000. Experts say the value drop isn’t surprising because investors tend to dump risky assets in difficult times. If only we hadn’t spent all our crypto on invisible art…