An index of global stock markets fell from five-month highs on Wednesday and U.S. Treasuries rose as corporate results stoked recession fears, overshadowing recent optimism that the Federal Reserve could soon reverse its aggressive monetary tightening.
The bleak outlook for Microsoft Corp (NASDAQ:MSFT) published yesterday point to a bleaker future for the technology sector, after warning that its customers were cautious about spending in an uncertain economy.
Boeing’s (NYSE) disappointing results:BAAmid continued supply chain constraints, they added to concerns about inflation, pressured by a resilient labor market that is likely to keep the Fed on its toes in its fight against inflation.
“The enemy is inflation, the catalyst is the labour market and that’s the bottom line,” said Johan Grahn, head of ETFs at Allianz (ETR:ALVG) Investment Management in Minneapolis. “While we see some changes, they are not significant enough to spook the Fed.”
Wall Street’s main indexes fell, while European stocks traded dull as signs of an improving economic outlook in the euro zone fueled fears of further rate hikes.
The pan-European index STOXX 600 It lost 0.3 percent and MSCI’s global equity measure was down 0.59 percent.
MSCI’s broadest index of Asia-Pacific stocks excluding Japan traded at seven-month highs. Trading volume was low, as the Chinese and Taiwanese markets remained closed for the Lunar New Year holidays.
Long-term bond yields rallied ahead of next week’s Fed policy meeting. The 10-year note yield gained 1.5 basis points to 3.482%.
In currency markets, the Australian dollar rose to $0.7123 following the latest inflation data. The Australian currency has appreciated 1.6% on the week and is poised for its biggest weekly gain in more than two months.
The Canadian dollar was down 0.36 percent at 1.34 per dollar after the central bank raised its policy rate to 4.5 percent and indicated it was unlikely to raise it again.
The euro advanced 0.03 percent to $1.0888. In raw materials, the prices of petroleum They earned around 1%.