The global stock market index falls to pre-vaccine lows

Fear that an old man monetary adjustment to control inflation driving the world economy into a recession sent the index plummeting MSCI World at levels not visited since November 2020, the lows before Pfizer announcement on the effectiveness of its vaccine against the coronavirus.

The global equity market drops 24.5% in 2022, two points less than the 26% that the emerging benchmark loses over the year.

Half of the MSCI World’s annual decline occurred in the past month, coinciding with the central bankers symposium in Jackson Holein which Jerome Powell, chairman of the US Federal Reserve, In his speech, he prioritized fighting inflation over economic deterioration. A position that the ECB approved three weeks ago when it embarked on the largest rate hike in history.

Nor has it helped to calm things down in the last few hours new UK tax plan. “These cuts are likely to lead to higher inflation and higher interest rates,” said Azad Zangana, senior economist for Europe and Schroders strategist.

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With this Monday’s decline, the global stock market thus joins the Euro Stoxx 50which already hit a 22-month low last Friday, and is down 21.5% since January, while the S&P 500 US trade is at its lowest level since June.

“Markets will continue to be challenged by uncertainty until companies start posting third quarter earnings next month, which will provide more insight into healthy revenue and corporate earnings,” said John Stoltzfus, chief investment. strategist of Oppenheimer, in statements to Bloomberg.

Oppenheimer: “Markets will continue to be challenged by uncertainty until companies start posting third quarter earnings.”

The macro data that will be known this week, among which highlight job applications in the US and GDP, along with PMI data from China, will also serve to test the pulse of investor fears,

Secondly, “dollar rally unsustainable for risk assetsincluding stocks, “Morgan Stanley strategists note.” In the past this kind of dollar strength has led to some sort of financial or economic crisis, “they add.