Russian Ruble Soars, Dollar Hit, US Subprime Defaults Rise

Following a significant drop in the previous trading session, U.S. stocks continued their downward trend in the early hours of today, with all three major stock indices falling in sync. This decline was due to a pessimistic outlook, as investors continued to sell off their shares.

However, in contrast to the independent performance of A-shares, the Chinese concept stocks listed in the U.S. fared quite well, with the index resisting the downturn and many individual stocks experiencing gains.

On another note, the U.S. dollar depreciated, while the Russian ruble appreciated significantly.

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By the close of the market in the early morning, the decline of the three major stock indices was not too severe, with none falling more than 1%. However, to date, the Nasdaq index has fallen from its high point at the end of November last year to the current level, with a decline of 30%.

It is worth noting that the Nasdaq index has seen significant declines in several months this year, with a drop of 7.7% just this month, which could potentially set the record for the largest monthly decline this year.

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The S&P 500 index, which had just crossed the 4,000-point mark, fell back after only three days. Last night, it barely held onto the 3,900-point threshold, with the intraday low breaking below 3,900 points to reach 3,876 points.

Looking at the industry breakdown, most sector-specific ETFs are in decline.

Daily consumer goods continue to be the worst performers, with another 1.8% drop last night. The poor performance of consumer goods is actually the best reflection of the current rise in inflation and prices.

As the general American public feels that the increase in their income is not keeping up with the rise in inflation, their real income is effectively decreasing. In this situation, facing increasingly expensive energy, food, and daily consumer goods, ordinary American families are choosing to cut back on spending, which has affected the performance of consumer goods ETFs. Conversely, discretionary consumer goods saw a slight increase last night.Since the interest rate hike in the United States, the NASDAQ has taken the lead with the largest decline, with many tech stocks having fallen by 20% to 40%.

Last night, Apple fell by 2.5%, and Google fell by 1.4%, as Cisco fell by 13.7% at the close last night due to underperforming expectations. The latest financial report released by this company shows that the operating income is far below the market's previous forecast.

In recent days, the most eye-catching on the US stock market has been the decline of several retail giants. After announcing financial reports the day before, Target fell by 24.9% and continued to fall by 5% last night.

Although the operating income of this company has increased slightly, the profit has decreased by more than 50% year-on-year, and the impact of inflation on corporate profits has become increasingly evident in the profits.

Amid a general market decline, the NASDAQ China Golden Dragon Index has actually seen a good increase. Last night, the index rose by 3.2%.

If we look at it over a longer period, even though the NASDAQ has been falling recently, the decline of the China Golden Dragon Index has been relatively small, and some of the Chinese concept stocks performed well last night, with Pinduoduo and iQiyi's gains exceeding 8%, and JD.com and Baidu's gains exceeding 5%.

As the United States adds more Chinese concept stocks to the pre-delisting list, the market has already developed immunity to this news.

In addition, although Tesla is still falling, Chinese concept stocks of new energy vehicles, such as NIO, XPeng, and Li Auto, all rose synchronously last night.In recent days, not only have U.S. stocks experienced a continuous decline, but the U.S. Dollar Index has also suffered a significant setback.

Some time ago, the U.S. Dollar Index surged past 105, but it then began to turn and fall rapidly, with yesterday's drop being the largest in the past year and a half.

As the U.S. Dollar Index fell, the Euro and British Pound rose in tandem, with both gaining more than 1.2%. The Australian Dollar and New Zealand Dollar even saw increases exceeding 1.5%, while the Japanese Yen's performance remained less impressive, only rising slightly by 0.4%.

However, the unexpected performer was the Russian Ruble. Although it had rapidly depreciated to 155 due to conflict, it has since been continuously appreciating under a series of strong measures taken by Russia and has now reached 62.

In this round of confrontation, the U.S. Dollar has been utterly defeated.

For the United States, a more significant issue stems from within the country, with signals akin to the 2008 subprime mortgage crisis repeatedly emerging.

Data analysis from a leading U.S. credit reporting agency shows that the default rate of subprime loans has been rising continuously, setting new records for eight consecutive months. The proportion of delinquent subprime credit cards and personal loans is increasing, with the proportion of those overdue for more than 60 days growing even faster.

The company traced the tracked data back to 2007 and found that in the current default data, the performance of subprime auto loans and lease loans had already surpassed the peak of 2008 as early as February of this year. Even considering that the current subprime loan base is larger than it was back then, the current situation is still very concerning.

The last subprime loan crisis originated from the United States' desperate efforts to flood the market in response to economic downturn. This time is very similar to the last, as after the COVID-19 pandemic, the United States also turned on the faucet. And as soon as the U.S. began to pivot towards contraction, the subprime loan bubble burst.But this time, it will be difficult for the United States to make the whole world share the consequences for it again.