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The Dow is falling–and so are gold prices. The pound falls to a 37-year low against the dollar, and the Canadian dollar weakens to a 2-year low. Carl Icahn warns investors “worst is yet to come” and more financial news.
On Friday, US stocks fell sharply, with the Dow dropping 408 points, dipping below 30,000, or 1.36%. The S&P 500 slid 1.7%, while the Nasdaq Composite lost 2%, CNBC reported.
Friday marks the fourth negative session in a row for the major averages. It is also the first time the Dow fell below 30,000 since June 17.
The decline comes following another move by the Fed to curb inflation by enacting another interest rate hike of 75 basis points on Wednesday, and indicating it is likely to add another hike at its November meeting.
During the current economic situation, most investors would believe this is the perfect time to own gold, as the physical metal has historically rallied during periods of high inflation.
However, mysteriously, gold prices aren’t surging – they are declining. Gold is down nearly 20% from a peak in March, which puts gold on the cusp of a bear market, CNN business reported.
The upward climb of the US dollar to a new two-decade high, which is up roughly 16% against a basket of major currencies, appears to be affecting gold prices.
The pound fell 2% on Friday, marking a 37-year low against the US dollar. It fell below $1.10 at one point. Additionally, the pound also plummeted more than 1 percent against the euro, dropping to €1.13, BBC reported.
UK stocks also fell after Kwasi Kwarteng outlined a number of tax cuts and economic measures in a considerable readjustment of Britain’s finances.
The Canadian dollar weakened to its lowest level in over two years against the US dollar on Friday amid a continuing selloff in global equity markets, while domestic data shows retail sales falling above estimates in July, Yahoo reported.
The loonie was trading 0.3% lower at 1.3525 to the greenback, or 73.94 U.S. cents, after slipping to its weakest level since July 2020 at 1.3551.
The world’s top investors, many economists, and Wall Street have all been warning a recession could be on the way. Now, Billionaire investor Carl Icahn is weighing in with his own dire prediction.
Icahn, chairman of Icahn Enterprises and boasts a net worth of $23 billion, issued a dire warning to MarketWatch at the Best New Ideas in Money Festival on Wednesday, telling the outlet rising inflation was one of the key factors that brought down the Roman Empire.
“The worst is yet to come,” Icahn said. “We printed up too much money, and just thought the party would never end…the party’s over.”
“Inflation is a terrible thing,” Icahn added. “You can’t cure it.”
The high rate of inflation is causing some millennials and Gen Zers to give up on investing, and close their accounts. Overall, nearly 1 in 5 consumers have closed an investing, trading, or brokerage account over the past 12 months, according to a survey, CNBC reported.
The rate is slightly higher for millennials and Gen Z, at 21%. Even worse, nearly 40% of those surveyed sold some or all of their investments due to inflation, while 31% sold assets over fears of losing money amid stock market volatility.
