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Global markets bounce back after heavy blow

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Markets around the world are expected to rebound today after a day of heavy losses.

The Australian ASX has bounced back big time following from Wall Street overnight that offset those tremors we saw last week.

Australian shares rushed to an early gain on Tuesday with the ASX 200 up 1.3 per cent, partly retracing the 1.8 per cent dip on Monday as global financial markets steadied after the anticipated moves from the Federal Reserve to thwart inflation.

Wall Street stocks rallied, staging a strong bounce back from last week’s rout.

The Dow last week suffered its worst week since October 2020, dropping 3.4 percent.

It came as the US Federal Reserve shifts towards a more hawkish stance on monetary policy, which could lead to higher interest rates.

That spooked investors last week, and the pain was felt on markets around the world on Monday,.

Fed Chair Jerome Powell is scheduled to appear before a congressional panel, and the markets are bracing for that.

Yesterday, markets across Asia dropped in early trade over inflation concerns

In Japan, the Nikkei slumped 4 per cent, while the Hong Kong Hang Seng dropped 1.45 per cent.

Mainland Chinese stocks were also down.

In South Korea, the market declined under 1 per cent.

The rollercoaster day for Australian investors

Australia’s share market dived in early trading after sharp falls on Wall Street on Monday.

The ASX 200 index fell as much as 1.5% to 7258 points.

It was the biggest decline in four weeks.

Sectors including Financials, Energy and Materials led early falls.

Commonwealth Bank fell 3.9% after a string of record highs in recent weeks.

The other major banks fell more than 2.2%.

Australian dollar is hitting a new low

So why has this happened? A big reason is following similar damage on Wall Street and in European markets which has been triggered by St Louis Federal Reserve president James Bullard predicting US interest rates would rise next year, perhaps earlier than some would expect.

The Australian dollar was firmer on Monday morning, buying around 75.05 US cents, after hitting its lowest level in six months as the US dollar strengthened.

Bullard added to expectations that US interest rates could rise sooner rather than later.

He is one of seven Fed policymakers to predict a first rate hike in 2022.

“This suggests the Fed will move earlier than the RBA and will be moving by slightly more than the RBA over 2023, which has implications for the [Australian dollar],” St George chief economist Besa Deda wrote.

Bitcoin takes a further tumble

Bitcoin fell to a two-week low amid an intensifying cryptocurrency crackdown in China.

The largest virtual currency fell 10% to $32,350 as of 8:50 a.m. in New York. Ether declined 13% to $1,950.

China announced on Monday that it summoned officials from its biggest banks to a meeting to reiterate a ban on providing cryptocurrency services. It’s the latest sign that China plan to do whatever it takes to close any loopholes left in crypto trading.

According to bitcoin aficionado Stephan Livera this latest crackdown, on one of the main regions for bitcoin mining, is the real deal.

This time seems like a more serious time. The largest mining pool operators have come out…so for example the leader of F2Pool (has said) from our numbers we’re seeing a very large drop in the amount of hash rate that’s coming to our pool out of China.” 

STEPHAN LIVERA, MINISTRY OF NODES

Bitcoin has many complex layers, it’s important to remember we’re talking specifically about bitcoin mining.

Mining is simply the process that sees new bitcoins entered into circulation. It’s also a critical component of the maintenance and development of the blockchain ledger. Mining is performed using very sophisticated computers that solve extremely complex computational math problems.

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Big tech stocks tumble amid market uncertainty

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Big tech companies are struggling in the markets this quarter as interest rates rise to battle inflation

Russia’s invasion of Ukraine has devalued tech stocks causing further supply chain disruptions and sending the broad S&P 500 index down about 5 per cent.

Rising interest rates triggered more severe plummets with the S&P dropping another 16 per cent and the Nasdaq Composite index by 22 per cent.

Tesla’s stock took a huge hit sinking to nearly 38 per cent its largest decline since 2010.

Amazon saw similar results falling by 35 per cent the most in over 20 years.

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Business

Google to pay millions to app developers

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App developers are accusing Google of tempting users into making in-app purchases.

The lawsuit relates to money that was made by app creators for Android smartphones.

The lawsuit was filed in a San Francisco court, where the 48,000 app developers are believed to have been affected.

“Following our win against Apple for similar conduct, we think this pair of settlements sends a strong message to big tech: the law is watching, and even the most powerful companies in the world are accountable when they stifle competition.”

Steve Berman, ATTORNEY FOR the Android developers.

Google says the settlement’s funds will support developers who have made less than USD $2 million in revenue between 2016 and 2021.

“A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose,” the company says.

Google says it will charge developers a 15 per cent commission on their first million in revenue.

The court is yet to approve the proposed settlement.

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Business

Tesla deliveries expected to fall – here’s why

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Tesla deliveries are expected to drop significantly in the second quarter, as prolonged Covid lockdowns in China and supply chain issues take their toll

The company is also struggling to ramp up its new factories, with Tesla boss Elon Musk seemingly distracted by his very public pursuit of Twitter.

Tesla has been plagued by production glitches in China and slow output growth at new factories in both Texas and Berlin.

Experts predict deliveries will slump to just over 295,000 vehicles for the second quarter.

This would be down from the company’s record of 310,000 in the preceding quarter, marking Tesla’s first quarter-on-quarter decline since 2020.

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