Chinese Stocks Tumbling Ahead of Fed Interest Rate Decision: What's Happening?
China-based stocks took a hit on Wednesday, as the market awaits the Federal Reserve's interest rate decision at 2:00 p.m. EDT.
The Hang Seng Index closed down 1.79% at 336.80 HKD, leading Alibaba Group Holdings, Ltd BABA and Baidu, Inc BIDU to open lower and continue their intraday decline. A number of other blue chip Chinese stocks slid in tandem.
Macro Outlook: Consumer Price Index data released by the US Department of Labor last week showed inflation remained elevated above expectations in August, despite four separate rate hikes launched in March, May, June and July. The news raised fears that the , could raise rates by 0.75% or even a full percentage point.
The prospect of another major rate hike has raised fears of a drying up of liquidity in Chinese markets. Unlike the United States, the Chinese government is stimulating the economy through quantitative easing.
The yuan also fell to a 26-month low amid China's continued strict COVID-19 controls.
According to a report.See also: Fed set to raise rates to levels not seen since before the Great Recession: What you need to know ahead of Wednesday's decision < /p>
The Technical Outlook: For technical traders, Alibaba and Baidu should continue to decline as stocks have been trading lower since August 26, despite the occasional and expected rally.
As the Fed decision approached on Wednesday, both stocks were forming lower wicks to print possible hammer candlesticks, indicating that a peak may be looming at the horizon, depending on the market's reaction to the printing of the information. .
For traders interested in technical analysis to guide their investments, there are a variety of tools available, including those from Ninja Trader.
Ninja offers advanced charting and other products as part of its trading suite designed to help investors navigate the markets. The platform allows its members to automate and execute trades and test simulation trading ideas.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
China-based stocks took a hit on Wednesday, as the market awaits the Federal Reserve's interest rate decision at 2:00 p.m. EDT.
The Hang Seng Index closed down 1.79% at 336.80 HKD, leading Alibaba Group Holdings, Ltd BABA and Baidu, Inc BIDU to open lower and continue their intraday decline. A number of other blue chip Chinese stocks slid in tandem.
Macro Outlook: Consumer Price Index data released by the US Department of Labor last week showed inflation remained elevated above expectations in August, despite four separate rate hikes launched in March, May, June and July. The news raised fears that the , could raise rates by 0.75% or even a full percentage point.
The prospect of another major rate hike has raised fears of a drying up of liquidity in Chinese markets. Unlike the United States, the Chinese government is stimulating the economy through quantitative easing.
The yuan also fell to a 26-month low amid China's continued strict COVID-19 controls.
According to a report.See also: Fed set to raise rates to levels not seen since before the Great Recession: What you need to know ahead of Wednesday's decision < /p>
The Technical Outlook: For technical traders, Alibaba and Baidu should continue to decline as stocks have been trading lower since August 26, despite the occasional and expected rally.
As the Fed decision approached on Wednesday, both stocks were forming lower wicks to print possible hammer candlesticks, indicating that a peak may be looming at the horizon, depending on the market's reaction to the printing of the information. .
For traders interested in technical analysis to guide their investments, there are a variety of tools available, including those from Ninja Trader.
Ninja offers advanced charting and other products as part of its trading suite designed to help investors navigate the markets. The platform allows its members to automate and execute trades and test simulation trading ideas.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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