Bloodbath: $110b wiped off ASX after Wall Street sinks into bear market

The Australian sharemarket dropped as much as 5 per cent this morning, down more than 349 points to a low of 6,582.70 with every stock on the ASX200 flat or lower. It follows Wall Street’s benchmark S&P 500 officially entering a bear market after worse than expected inflation numbers raised the prospect of aggressive interest rate hikes by the US Fed.

The centre of Wall Street’s focus was again on the Federal Reserve, which is scrambling to get inflation under control. Its main method is to raise interest rates in order to slow the economy, a blunt tool that risks a recession if used too aggressively. The 10-year yield jumped to 3.34 per cent from 3.15 per cent, and the higher level will make mortgages and many other kinds of loans for households and for businesses more expensive. It has more than doubled this year and touched its highest level since 2011.

Bears hibernate, so bears represent a market that’s retreating, said Sam Stovall, chief investment strategist at CFRA. In contrast, Wall Street’s nickname for a surging stock market is a bull market, because bulls charge, Stovall said.

With a major war underway months ago , inflation & market due for a correction it was pretty easy decision for many to move some of superannuation accounts to cash or less risk options months ago ( or in stocks language take some profits off table as they say ) ASX

Thank God interest rates will keep going up

Many bargins to be had in the market today.

'Be fearful when others are greedy and greedy when others are fearful.” Warren Buffet

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