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Stocks extend sharp declines on concerns over global growth

Stock markets fell on Monday, prolonging weeks of losses, as concerns about high interest rates hurting global growth joined weak economic data from China.

Europe’s regional stock index Stoxx 600, which finished each of the last four weeks in red, lost 1.2%. China’s onshore CSI 300 meter fell 0.8%. Futures that follow the broad Wall Street S&P 500 are down 1.5%, while those that follow the high-tech Nasdaq 100 are down 1.7%.

These moves came when U.S. stock markets closed their market on Friday The longest sequence Of weekly losses since 2011, after the Federal Reserve raised its key interest rate by 0.5 percentage points to curb rising inflation. Rising interest rates last week from central banks in the UK, India and Australia also overshadowed the progress reported by companies during the quarterly earnings season.

Which adds to concerns about the economic implications of tighter monetary policy, data On Monday it showed that Chinese export growth slowed significantly in April as the country was hit by a tight lock of cobid and weak consumer spending in Europe and the US. two years.

The dollar, which measures the U.S. currency against six others and tends to rise as appetite for riskier assets declines, rose 0.4 percent to a new 20-year high. The Chinese renminbi fell 0.7% to a new 18-month low against the dollar.

“Wind against higher bond yields, higher inflation, fears of recession and geopolitics [weighed] In the market, “said Citi’s equities strategist Beata Manthey. And while more than two-thirds of European companies that have reported quarterly results so far have exceeded analysts’ forecasts,” we fear it will not hold up, “she said, noting the” weakening macro environment. ”

U.S. government debt came under renewed pressure on Monday, when the yield on the 10-year US Treasury bill rose by 0.06 percentage points to 3.18 percent – a continuation of months of losses for bond investors, as higher interest rates on cash decreased The gravity of the constants. Income-paying debt instruments. The five-year Treasury yield rose by 1.0 percentage points to 3.1%, a level not seen since 2008. Bond yields rise as their prices fall.

Investors are now considering how far the Fed will continue to raise interest rates, and whether it will curb its tightening efforts to protect financial markets.

“It will take a pretty big risk move to get the Fed to reactivate the pigeon,” said David Zerbus of Jeffries Investment Bank. Fed Chairman Jay Powell added, “is not going to go down in history as chairman of the central bank that blew up 40 years of credibility against hard-earned inflation.”

Higher credit costs hamper the attractiveness of more speculative companies, whose investment cases are often based on predictable cash flows far into the future.

As the US dollar strengthened on Monday, the euro fell 0.4% to just over $ 1.05.

“As investors focus on the growing threat of a eurozone recession, it’s hard to see what could trigger a rise in the euro,” said Nick Andrews of Gavekal Research.

Meanwhile, Japan has joined other G7 countries in pledging to ban or stop Russian oil imports. The EU is discussing similar sanctions, although the discussions have failed Objections from Hungary.

Brent crude oil, the international oil index, fell 0.9 percent to just over $ 111 a barrel.

Stocks extend sharp declines on concerns over global growth Source link Stocks extend sharp declines on concerns over global growth

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