Stocks extended sell-offs on Thursday amid fears of an economic downturn, prompting flights to the shelter, including bonds.
An Asia-Pacific equity index fell nearly 2%, leading to losses for Japanese and Chinese technology companies. US and European futures have lagged behind as the S&P 500 index has fallen 4%, the biggest daily decline in nearly two years.
Reports of earnings from U.S. consumers have raised concerns that high inflation is weighing on margins and consumer spending. Target Corporation sank the most since Black Monday in 1987, a day after Walmart Inc. also plunged.
Federal Reserve officials have confirmed that tougher monetary policy is in place to cool economic activity and control price pressures. Charles Evans, president of the Chicago Fed, said raising interest rates to a somewhat neutral level and stopping there should help reduce inflation.
Treasuries have rallied, bonds have jumped in Australia and the dollar is strong. China’s cowardly lockdowns are also shaking markets, with oil prices hovering around 110 110 a barrel after retreating this week due to demand concerns.
The challenge from inflation for Belvedere retailers undermines the argument that corporate earnings could help stem the stock’s decline this year. Instead, global equities are sliding into a bear market as fears of a recession mount.
“We are pricing for fear of an increase,” Lori Calvassina of RBC Capital Markets told Bloomberg TV. “The market is trying to find a bottom here. There is a lot of uncertainty in the market right now about whether that recession is going to come through or whether it is going to be another near-death experience. “
Signs of pressure are being created in the credit market. Yield premiums on U.S. investment-grade corporate dollar bonds jumped five basis points on Wednesday, one of their biggest moves this year, the Bloomberg index shows. They are now at their peak since mid-2020.
Christopher Smart, chief global strategist at Bearings LLC in Bloomberg, said: “Most of us have investors who have lived through three or four decades of low interest rates, qualitative growth for equities and strong earnings. Television. “Now you are entering a very new stage where we are not really sure where inflation will go down.”
In other company news, Tencent Holdings Ltd. sank after warning that it would take time for Beijing to deliver on its promise to advance China’s technology sector. Cisco Systems Inc. Extended US trading has slipped in a disappointing revenue outlook.
Meanwhile, Treasury Secretary Janet Yellen has confirmed that it is unlikely the United States will allow Russia to continue issuing its foreign currency loan bonds, as investors have time to adjust to Moscow’s exclusion from the global financial system for the war in Ukraine.
Some of the major rice in the market:
- The S&P 500 futures fell 0.6% as of 10:43 a.m. in Tokyo. S&P 500 down 4%
- Nasdaq 100 futures fell 0.9%. Nasdaq 100 down 5.1%
- Japan’s topics index fell 2.2%
- Australia’s S&P / ASX 200 index fell 1.7%
- South Korea’s Kospi index fell 1.8%
- China’s Shanghai Composite Index fell 1%
- Hong Kong’s Hang Seng Index fell 3%
- Eurostocks 50 futures fell 1.2%
- The Bloomberg dollar spot index was stable
- The euro was at $ 1.0479
- The Japanese yen was at 128.47 per dollar
- Offshore yuan was 6.7789 per dollar
- Yield to 10 year Treasury was 2.89%
- Australia’s 10-year yield fell 10 basis points to 3.37%
- West Texas Intermediate crude rose 0.4% to $ 110.05 a barrel
- Gold price was $ 1,816.63 per ounce