The crypto market’s largest assets have noted significant increases even as giant Magnificent Seven tech stocks plunged yestereday.
Stocks of tech companies called the “Magnificent Seven” fell significantly after several companies published earnings reports that provoked concerns about a recession in the tech space. On Wednesday, October 25, the Magnificent Seven lost more than $280 billion. The stocks comprise seven giant tech firms, including Apple Inc (NASDAQ: AAPL), Alphabet (NASDAQ: GOOGL), Nvidia (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), Meta (NASDAQ: META), Tesla (NASDAQ: TSLA), and Microsoft (NASDAQ: MSFT).
Magnificent Seven Stocks Plunge Triggering Recession Concerns
Google’s parent company, Alphabet, had the largest fall, losing over 9%, equivalent to $180 billion. In a post on X (formerly Twitter), The Kobeissi Letter mentioned that it was the company’s worst day since March 2020. The global capital market commentary service also noted in another post that the “7 stocks effectively account for the entire S&P 500 YTD [year-to-date] rally.”
According to MarketWatch data, Amazon fell 5.58%, while Nvidia and Meta lost 4.31% and 4.17%, respectively. Tesla and Apple withstood smaller losses at 1.89% and 1.35%, respectively. Of the Magnificent Seven stocks, only Microsoft gained, rising 3.07% to $340.67. Microsoft has also increased 2.82% in the last 5 days and 8.62% in the last month. The company’s YTD gains have crossed 41% so far, and 50.24% in the last year.
The Kobeissi Letter also suggested that stocks are pricing in a recession. The argument is that the S&P 500 has lost a heavy $4 trillion since its July 27 high. The post also revealed that the index is only 1% from “correction territory” after losing 430 points in three months. Furthermore, the market is now at its lowest since May, with 3 rate cuts already priced in the last time the S&P 500 was at its current level. As high rates and futures no longer show rate cuts until next July, The Kobeissi Letter is now considering the likelihood of a recession.
Google search trends also point to general feats of a recession as searches for “stock market crash” jumped 233% in the past week, according to TheFinanceNewsletter.com reporter Andrew Lokenauth.
Crypto Market Rises as Magnificent Seven Falls
The crypto market has recorded some increase even as the Magnificent Seven stocks point to a possible recession. According to data from CoinMarketCap, the 20 largest cryptocurrencies by market cap, except stablecoins USDT and USDC, all recorded considerable increases over the last seven days. The largest was Chainlink (LINK) at 50.3%, followed by Solana (SOL) at 36%. Others were Bitcoin (BTC) at 22%, ETH at 19.37%, Cardano (ADA) at 22.57%, Dogecoin (DOGE) at 23.91%, and Polygon (MATIC) at 22.39%. The DAI token was the lowest at only 0.05%.
The current underperformance in the Magnificent Seven stocks goes against earlier advice from TV personality and author Jim Cramer. In July, Cramer recommended the seven tech stocks, noting that they are balanced enough to withstand market swings. However, his recommendation pointed out that the stocks could buck under some pressure depending on market movements. Nonetheless, Cramer iterated that analysts “have no shortage of reasons to recommend them.”
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