Stocks are looking at the worst first-half of a year since 1970, with investors weighed by worries over inflation, recession and central banks.
U.S stock futures fell sharply on Thursday, as traders anticipated the release of inflation data closely watched by the Federal Reserve, and Wall Street braced for its worst first half of the year since 1970.
How are stock-index futures trading? On Wednesday, the Dow Jones Industrial Average DJIA rose 82 points, or 0.3% to end at 31,029.31. The S&P 500 SPX lost 0.1% to 3,818.83. The Nasdaq Composite COMP lost less than 0.1%, closing at 11,177.89. In previous recent episodes of market tantrums, such as the 2020 COVID-19 sell-off, investors could look to central banks for succour. But with inflation in most major economies at their highest level in many decades, monetary guardians like the Federal Reserve are stressing their committment to tighten policy to damp price pressures. Even if that means hurting growth and, consequently, corporate profits.
“Implied Fed pricing has declined over the last few weeks – from a peak of 4% to more like 3.50 %. But that is a ton of rate hike risk for the market to digest,” he said. The yield on the US 10-year Treasury TMUBMUSD10Y was down 5 basis points to 3.053%, reflecting a move into perceived havens. Deteriorating risk apetite has pushed bitcoin BTCUSD back below $20,000, where it was trading on Thursday.
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