Many investors around the world have lost interest in shares in view of rising interest rates and concerns about a possible impending recession. Although the US stock exchanges had revolted briefly in the previous week, the sadness quickly caught up with investors again in the past few days. The leading US index is currently down by more than two percent for the current week.
Deep red, with a discount of up to 30 percent, was the balance sheet on the US stock exchanges for the first half of the year, which ended the day before – the price losses on Wall Street were higher than they had been in decades: For example, it was for the market-wide S&P 500 weakest first six months since 1970. The Nasdaq 100 technology selection index’s January-June result was its worst since 2002.
At the same time, fears of the central banks possibly overtightening are dominating the markets. The currency watchdogs are reacting to the record high inflation by raising interest rates – as is the US Federal Reserve. Just this week, its boss Jerome Powell again underlined the obligation of the monetary watchdogs to further tighten monetary policy in order to get inflation under control. Data from the euro zone showed on Friday that record high inflation is continuing there as well.
With recession fears mounting, the market has also begun to assess the impact on corporate earnings prospects, wrote expert Stephen Innes of Spi Asset Management. The focus of stockbrokers should therefore be on this trading day on the ISM index for industry, which is considered an important economic indicator. The publication is due shortly after the start of trading.
The semiconductor manufacturer Micron is now also feeling the effects of weaker demand. The sales outlook for the last business quarter published the evening before was disappointing, according to stockbrokers. The stock fell nearly 5 percent premarket.
Meanwhile, the Kohl’s department store chain caused a sensation – it announced the end of talks about a takeover by the Franchise Group. Management cited the challenging financing and retail environment after three weeks of exclusive negotiations, saying these are impediments to reaching an acceptable agreement with the potential buyer. Many disappointed investors fled the title before the market, which has already been under massive pressure for weeks./tav/jha/