LONDON: US and European stock markets fell mostly on Thursday, as showed by US data. inflation Jumping to a four-decade high, raising concerns that the Federal Reserve may proceed more aggressively with interest rate hikes.
According to government data, US consumer prices increased at an annual rate not seen since February 1982, a 7.5 percent increase in the 12 months to January.
Wall Street’s three major indices opened with a fall Nasdaq Tech companies listed as low as 1.5 percent are more sensitive to higher interest rates.
Analysts at Charles Schwab Investment Firm said a “surprising rally” in consumer prices “raised expectations of a more aggressive response from the Fed”.
In Europe, the Paris CAC 40 and Frankfurt DAX were down in afternoon trading after early morning gains, but London’s FTSE 100 was up.
Europe had its share of negative news as the European Commission cut its forecast of eurozone economic growth as energy prices and supply chain problems drive up inflation.
This was followed by a broadly positive week for global equities, thanks to some healthy earnings results, signs of reopening economies and easing Russia-Ukraine tensions.
Some Fed officials said on Wednesday that policymakers would make their decisions based on the data coming to their desks, with a 50-basis-point increase — as opposed to the usual 25 basis points — not off the table.
Rising inflation and bets that the US central bank will end its pandemic-era cheap cash policies have weighed on world markets in recent months, halting a two-year rally that saw them hit a record or multi-year high. level seen.
The yield on the proxy 10-year US Treasury note reached two per cent on Thursday for the first time since July 2019.
“The market is not only concerned about inflation, it is also concerned about the Fed’s response to inflation,” said JJ Kinahan, chief market strategist at TD Ameritrade.
“Raising interest rates may be appropriate monetary policy, but it does not mean that the market as a whole will react positively,” he said.
Earnings Growth – In some quarters it is felt that investors are getting used to the prospect of higher borrowing costs, however, still strong economic data and easing of control measures continue to support the company’s earnings Will keep
French energy giant TotalEnergies bounced back from the Covid crisis with huge gains for 2021 due to rising oil and gas prices.
The company reported a net profit of $16 billion in 2020 after a loss of $7.2 billion, when crude oil prices crashed.
Elsewhere, signs of progress on the diplomatic front in Eastern Europe have put a limit on the rise in oil prices in recent days, as has the prospect of a revived Iran nuclear deal, which allows Tehran to restart worldwide exports. and reduce supply problems.
Both main contracts were higher on Thursday, reaching their highest level since 2014 this year.
Oil prices edged higher in other markets while the dollar strengthened against other major currencies.
Key figures around 1435 GMT – New York – Dow: down 0.7 percent to 35,513.88 points
LONDON – FTSE 100: UP 0.2 percent 7,654.59 . Feather
Frankfurt – DAX: down 0.1 percent to 15,466.40 . Feather
Paris – CAC 40: down 0.8 percent to 7,027.43
Euro STOXX 50: down 0.5 percent to 4,183.14
TOKYO – Nikkei 225: UP 0.4 percent at 27,696.08 (close)
Hong Kong – Hang Seng Index: UP 0.4 percent at 24,924.35 (close to)
Shanghai – Overall: UP 0.2 percent at 3,485.91 (close to)
EUR/dollar: down from $1.1425 at $1.1406 late Wednesday
Pound/Dollar: UP $1.3556 to $1.3535
Euro/Pound: down from 84.40 pence to 84.13 pence
Dollar/yen: UP from 115.52 yen to 116.19 yen
Brent North Sea crude: UP 0.9 percent at $ 92.42 a barrel
West Texas Intermediate: UP up 1.1 percent to $90.68 a barrel
According to government data, US consumer prices increased at an annual rate not seen since February 1982, a 7.5 percent increase in the 12 months to January.
Wall Street’s three major indices opened with a fall Nasdaq Tech companies listed as low as 1.5 percent are more sensitive to higher interest rates.
Analysts at Charles Schwab Investment Firm said a “surprising rally” in consumer prices “raised expectations of a more aggressive response from the Fed”.
In Europe, the Paris CAC 40 and Frankfurt DAX were down in afternoon trading after early morning gains, but London’s FTSE 100 was up.
Europe had its share of negative news as the European Commission cut its forecast of eurozone economic growth as energy prices and supply chain problems drive up inflation.
This was followed by a broadly positive week for global equities, thanks to some healthy earnings results, signs of reopening economies and easing Russia-Ukraine tensions.
Some Fed officials said on Wednesday that policymakers would make their decisions based on the data coming to their desks, with a 50-basis-point increase — as opposed to the usual 25 basis points — not off the table.
Rising inflation and bets that the US central bank will end its pandemic-era cheap cash policies have weighed on world markets in recent months, halting a two-year rally that saw them hit a record or multi-year high. level seen.
The yield on the proxy 10-year US Treasury note reached two per cent on Thursday for the first time since July 2019.
“The market is not only concerned about inflation, it is also concerned about the Fed’s response to inflation,” said JJ Kinahan, chief market strategist at TD Ameritrade.
“Raising interest rates may be appropriate monetary policy, but it does not mean that the market as a whole will react positively,” he said.
Earnings Growth – In some quarters it is felt that investors are getting used to the prospect of higher borrowing costs, however, still strong economic data and easing of control measures continue to support the company’s earnings Will keep
French energy giant TotalEnergies bounced back from the Covid crisis with huge gains for 2021 due to rising oil and gas prices.
The company reported a net profit of $16 billion in 2020 after a loss of $7.2 billion, when crude oil prices crashed.
Elsewhere, signs of progress on the diplomatic front in Eastern Europe have put a limit on the rise in oil prices in recent days, as has the prospect of a revived Iran nuclear deal, which allows Tehran to restart worldwide exports. and reduce supply problems.
Both main contracts were higher on Thursday, reaching their highest level since 2014 this year.
Oil prices edged higher in other markets while the dollar strengthened against other major currencies.
Key figures around 1435 GMT – New York – Dow: down 0.7 percent to 35,513.88 points
LONDON – FTSE 100: UP 0.2 percent 7,654.59 . Feather
Frankfurt – DAX: down 0.1 percent to 15,466.40 . Feather
Paris – CAC 40: down 0.8 percent to 7,027.43
Euro STOXX 50: down 0.5 percent to 4,183.14
TOKYO – Nikkei 225: UP 0.4 percent at 27,696.08 (close)
Hong Kong – Hang Seng Index: UP 0.4 percent at 24,924.35 (close to)
Shanghai – Overall: UP 0.2 percent at 3,485.91 (close to)
EUR/dollar: down from $1.1425 at $1.1406 late Wednesday
Pound/Dollar: UP $1.3556 to $1.3535
Euro/Pound: down from 84.40 pence to 84.13 pence
Dollar/yen: UP from 115.52 yen to 116.19 yen
Brent North Sea crude: UP 0.9 percent at $ 92.42 a barrel
West Texas Intermediate: UP up 1.1 percent to $90.68 a barrel
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