Global stock markets are falling as inflation and economic concerns remain
On Thursday, global shares slumped to an 18-month low, as investors worried that rising inflation would endure, forcing central banks to continue tightening monetary policy. Stocks in the United States closed a choppy session marginally down, as investors juggled concerns over lingering inflation with evidence that it may be peaking. Since plunging from its all-time high in January, the S&P 500 has come dangerously close to confirming a bear market.
A German warning that Russia was now using energy supply as a “weapon” heightened economic concerns in Europe. The STOXX 600 index was down 0.75 percent throughout Europe. As of 5:09 p.m. ET, the MSCI global stock index was down 0.69 percent (2109 GMT). Oil prices were uneven as a result of supply concerns stemming from the planned European Union embargo on Russian oil. Brent crude dropped 6 cents to $107.45 per barrel. WTI crude oil increased 42 cents, or 0.4 percent, to $106.13 a barrel.
The producer price index for final demand grew 0.5 percent in April, less than the 1.6 percent increase in March, according to the US Labor Department, as growing energy prices slowed. Consumer price growth fell to 8.3 percent in April from 8.5 percent in March, but it still beat experts’ expectations of 8.1 percent.
“Since the Fed hiked rates… and the accompanying robust US jobs market, and CPI statistics have reinforced worries over the scale of the task confronting the Fed,” ANZ bank analysts stated. Overnight, the leading pan-Asian Pacific indices fell 2.5 percent to a 22-month low. The Nikkei 225 lost 1.8 percent. Stocks in emerging markets fell 2.28 percent.
Treasury yields have fallen. After the benchmark US government bond fell to a morning low of 2.816 percent, the yield on 10-year Treasury notes US10YT=RR plummeted 7.1 basis points to 2.843 percent. Germany’s benchmark 10-year yield fell as much as 15 basis points to 0.85 percent, its lowest level in over two weeks.
With the collapse of the so-called stablecoin TerraUSD, selling in bitcoin, and a 15% drop in the next-largest cryptocurrency, ether, the crash in cryptocurrency markets proceeded .Tether, the world’s largest stablecoin by market capitalization with a value directly linked to the dollar, has fallen below its so-called “peg” to the dollar. Crypto markets have already lost over $1 trillion due to the worldwide sell-off. This week, about a third of that loss occurred. “The breakdown of the peg in TerraUSD has resulted in several unpleasant and foreseeable consequences. BTC, ETH, and most ALT coins have suffered widespread liquidation “Other cryptocurrencies, stated Richard Usher, head of OTC trading at BCB Group.
Precious metals were also down. Gold declined 1.7 percent to $1,821.52 an ounce on the spot market. Gold futures in the United States declined 1.64 percent to $1,823.80 per ounce. In official trade, benchmark copper on the London Metal Exchange was down 3.6 percent at $9,000 per tonne, after sliding as low as $8,938. Prices have dropped 17% after reaching a peak of $10,845 in March.