RTL Today – Stock market: Stock markets fall against US inflation

U.S. stock markets fell on Thursday as data showed inflation hit a four-decade high, raising fears the Federal Reserve could act aggressively with interest rate hikes.

Consumer prices in the United States have risen at an annual rate not seen since February 1982, rising 7.5% in the 12 months to January, according to government figures.

All three major Wall Street indexes fell, although they pared initial losses.

“The surprising acceleration” in consumer prices “has boosted expectations of a more aggressive response from the Fed,” said analysts at investment firm Charles Schwab.

“The initial optimism that we might see evidence that US inflation could ease, which had helped push US markets higher this week, and higher in pre-market, has evaporated sharply” after the release of the data, said market analyst Michael Hewson at CMC. Markets.

Some Fed officials said Wednesday that policymakers would make their decisions based on the data coming in, with a 50 basis point hike – as opposed to the usual 25 basis points – not out of place.

Soaring inflation and bets that the US central bank will end its pandemic-era cheap liquidity policies have weighed on global markets in recent months, stalling a two-year rally that has taken them seen to reach record or multi-year highs.

The yield on the 10-year U.S. Treasury note, an indicator of interest rates, hit 2% on Thursday for the first time since July 2019.

“The market is not just concerned about inflation, it’s 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 that doesn’t mean the market as a whole will react positively,” he said.

In Europe, London’s FTSE 100 rose, Frankfurt’s DAX rose slightly and in Paris, the CAC 40 slipped.

Europe had its share of negative news as the European Commission slashed forecasts for eurozone economic growth, with energy prices and supply chain issues driving up inflation.

This followed an overall positive week for global equities thanks to strong earnings results, further reopening of economies and signs of easing tensions between Russia and Ukraine.

– Increase in income –

Some quarters, however, feel that investors may be getting used to the prospect of higher borrowing costs, while continued strong economic data and easing lockdown measures will continue to support corporate earnings.

French energy giant TotalEnergies rebounded from the Covid crisis with a huge profit in 2021 as oil and gas prices soared.

The company reported a net profit of $16 billion after a loss of $7.2 billion in 2020 when crude prices crashed.

Elsewhere, signs of progress on the diplomatic front in Eastern Europe have limited rising oil prices in recent days, as has the possibility of a revived Iran nuclear deal, which could see Tehran resume global exports and ease supply issues.

The two main contracts were nevertheless up on Thursday, after rising this year to their highest levels since 2014.

– Key figures around 4:30 p.m. GMT –

New York – Dow Jones: DOWN 0.4% to 35,628.05 points

EURO STOXX 50: DOWN 0.1% to 4,199.40

London – FTSE 100: 0.4% up to 7,672.40 (close)

Frankfurt – DAX: UP less than 0.1% to 15,490.44 (closing)

Paris – CAC 40: DOWN 0.4% to 7,101.55 (closing)

Tokyo – Nikkei 225: 0.4% higher at 27,696.08 (close)

Hong Kong – Hang Seng Index: UP 0.4% to 24,924.35 (close)

Shanghai – Composite: UP 0.2% to 3,485.91 (close)

Euro/dollar: UP at $1.1486 against $1.1425 on Wednesday evening

Pound/dollar: UP to $1.3630 from $1.3535

Euro/pound: DOWN to 84.29 pence vs. 84.40 pence

Dollar/yen: UP to 115.84 yen from 115.52 yen

North Sea Brent: 1.3% up to $92.74 a barrel

West Texas Intermediate: UP 1.8% to $91.25 a barrel


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