Global stocks rose over a stormy weekend after China unveiled new incentives to combat the slowdown in growth in the world’s largest emerging market.
The S&P 500 stock index on Wall Street rose 1% in morning trading, and the high-tech Nasdaq Composite climbed 1.2%. Europe’s regional stock index Stoxx 600 added 1.4%, following gains in Asia.
The moves in response to China Lowering mortgage interest rates Pointed to a long downward trend in global equities, driven by a jolt on higher interest rates, sharp inflation and a slowdown in economic growth.
The S&P was still on Friday ahead of its seventh consecutive week of declines – its longest streak of losses, on that basis, since the dotcom bubble burst in 2001, according to Refinitiv data.
“Markets are slowing down,” said Gregory Pardon, co-investor at Arbuthnot Latham. “It’s a combination of fear of Ma [Federal Reserve] It is a mistake if they raise interest rates too quickly, and fear that this inflationary trend will eat away at spending, which will then lead to a decline in corporate profits. “
In Asia, Hong Kong’s Hong Kong up 3% and the Japanese Nikkei 225 rose 1.3%.
“Beijing wants to save the asset markets, which have experienced the worst contraction in many years,” said economists at Nomura.
But the Bank of Japan warned that the impact of lowering the five-year prime interest rate on loans from 4.6% to 4.45% would be “limited”, as “the wave of omicrons and draconian closures in about 40 cities significantly limits Chinese mobility, employment, income and confidence.”
Chinese Economic activity declined Last month, during Corona virus aggravations. Goldman Sachs this week cut China’s growth forecast for 2022 to 4%, compared to a previous forecast of 4.5%.
Concerns about global growth caused investors to withdraw money from stocks, bonds, gold and cash last week, according to EPFR mutual fund data analyzed by Bank of America.
The stock exchange fund provider WisdomTree also reported this week a net cash flow from some of its most durable stock products, including those holding baskets from the highest quality companies and those that follow high-dividend stocks that are generally preferred during periods of market turmoil.
Concerns about e Global economy Increased after the Fed, the Bank of England and other leading central banks raised borrowing costs and signaled further increases.
Inflation soared to decades of highs in the U.S. and Europe after economies reopened following the Corona virus locks and Russia’s invasion of Ukraine, which disrupted food and fuel supplies. U.S. retailers Walmart and Target this week Issued reduced earnings reportsEmphasizing how companies and consumers are struggling with rising costs.
The yield on the 10-year US Treasury bill was stable at 2.87%, down from last week’s high of 3.2%. Treasury yields, which are upside down in price, fell this week as a jolt of growth prompted traders to look for low-risk assets.
Leading currencies were swept, with sterling rising 0.1% against the dollar to $ 1.24 and the euro falling 0.1% to just below $ 1.06.
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