Global stock markets continued to decline this Thursday, as new signs of slowdown Growth prompted investors to sell stocks and move into safe havens such as government bonds and the Swiss franc, which was on track for its biggest one-day gain in more than six years.
Supply chain issues continued to fuel inflation and growth concerns, after Cisco Systems warned of persistent component shortages, sending its shares tumbling 13% to push the S&P 500 closer to bear market territory.
Goldman Sachs now estimates a 35% chance of a US recession; Morgan Stanley estimates a 25% chance
In Wall Street, shares were trading mixed. Industry Average Dow Jones fell 0.8%the S&P 500 index lost 0.6% and the index Nasdaq Composite ended down 0.3%after having traded positive for most of the session.
So far in 2020, the Nasdaq se hunde un 27%; the benchmark S&P 500, down 18%, and the Dow Jones, down 14% in one of the worst starts to a trading year since the 1930 crash, as dire warnings from some of the world’s biggest retailers underscored the tough of inflation.
Data released Thursday showed that the factory production in the North Atlantic region of the United States slowed down much more than expected in May and the business outlook for the next six months is the weakest in more than 13 years, according to a regional Federal Reserve survey.
Traders are looking for a catalyst to change the stock market’s negative slant
The operators are looking for a catalyst to change the market’s tilt as it nears its short-term low, he told Archyde.com Rick Meckler, Chairman of hedge fund LibertyView Capital Management. “There’s probably still enough fear among investors to see a few more downdrafts,” he said.
“But I think we are starting to get to a point where prices seem to be more in line with economic conditions. We can move from overwhelming pessimism to start looking, hopefully, for some changes in the problems we face.”
Goldman Sachs now estimate a 35% chance of a recession in the United States in the next two years, while Morgan Stanley estimates 25% of possibility in the next 12 months.
The pessimism of traders In New York spread to the rest of the squares financial. MSCI’s gauge of global stocks fell 0.3% and the pan-European STOXX 600 index closed down 1.5% earlier.
Asia-Pacific ex-Japan stocks snapped four days of gains and weakened 1.8%, dragged down by a 1.65% loss in the Australian heavy metals index, down 2.5 % of the stock index in Hong Kong. The Japanese Nikkei dropped 1.9 percent.
Germany’s 10-year bond yield fell below 1% a year, implying a negative rate against inflation, and US debt yields slipped, as weak economic data raised concerns about growth that could be exacerbated by aggressive monetary tightening by the US Federal Reserve.
The performance of US treasury bonds ten-year declining three basis points to the 2,855%after hitting a three-week low of 2.77 percent.
Meanwhile, the dollar depreciated across the board against other core currencies, to extend its slide from a two-decade high, as currencies hardest hit by the greenback’s surge this year attracted some buyers.
KEEP READING: