Global stock markets fell sharply on Thursday, cashing in on economic statistics showing inflation still high and risks to the pace of economic growth in the United States.
Concerns over Russian gas supplies
The New York Stock Exchange opened lower, with the Dow Jones down 1.68%, the Nasdaq down 2.71% and the S&P 500 down 1.93% by 2:20 p.m. European indices remained in bright red color and did not move away from the -3% mark. Paris fell by 2.60%, London by 2.65%, Frankfurt by 2.73% and Milan by 3.05%. Concerns about Russian gas supplies added to remaining investor fears. The PCE index, which measures US inflation and is backed by the Federal Reserve, remained elevated at 6.3% in May. Inflation rose 0.6% over the month, slightly below analysts’ forecasts of +0.7%.
In addition, household spending growth has slowed. If this slowdown in household consumption continues in June, it could weigh on GDP in the second quarter, while consumption is the main driver of the US economy. In France, price growth accelerated to 5.8% over the year. June. The Eurozone index is expected on Friday. This bright red session is like the end of the semester. disastrous. The S&P 500 has lost more than 20% year-to-date, its worst record since 1970, which “mainly explained by investors’ fear that continued rate hikes“To fight against inflation by central banks”.do not cause a recession“, Deutsche Bank economists estimate. Sovereign interest rates have fallen sharply again, particularly in Europe. The German 10-year bond yield was 1.38%, compared with 1.62% at Tuesday’s close. On Wednesday, Fed Chairman Jerome Powell reiterated his belief that the US economy is in “Good bodyand need to cash in on the cash flow without slipping into recession, which many analysts suspect. However, central bankers gathered at the European Central Bank seminar also reaffirmed that inflation will remain high for a long time.
Uniper appeals to the German state
German energy company Uniper sank more than 16% after suspending its earnings forecast for the year, citing gas tensions and in particular falling volumes sent by Gazprom to Germany. The company has started negotiations with the German governmentstabilization measures“. “In addition to market fears about recession risk, another energy supply shock could be a tipping pointreinforcing a scenario of stagflation for the economy or even worse, according to Steven Innes, an analyst at Spi Asset Management. Finland’s Fortum, which owns Uniper, also lost 5.67%. Other energy companies, such as E.ON (-5.43%) or Engie (-4.85%), also fell sharply.
A road trip for Aston Martin
Luxury car maker Aston Martin Lagonda fell almost 18% as investors worried about reports that the company is seeking fresh financing.
On the oil and currencies side
Oil prices fell after a decision by OPEC+ oil producers this summer renewed their aim to open the valves a little wider. However, it will not be enough to stop the increase in prices due to the Ukrainian war. Brent crude for August delivery from the North Sea was down 1% at $115.10 a barrel, while WTI by the same maturity was down 2.10% at $107.48 by 14:10 GMT. within the limits.
The exchange rate of the euro decreased by 0.13%, reaching 1.0429 dollars.
In another sign of investor risk aversion, bitcoin fell 6.53% to $18,900 and the safe-haven Swiss franc rose 0.10% against the euro, the European single currency’s highest since January 2015. to achieve the highest level of equality. .
Source: Le Figaro
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