(Bloomberg) — Stocks and US equity futures came under more pressure Tuesday as concerns about a darkening economic outlook hang over global markets and support the dollar.
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Shares fell about 2% in Japan, South Korea and Australia after US stocks slid to a 13 month-low. The tech-heavy Nasdaq 100 has shed about $1.5 trillion in market value after three days of heavy selling.
Commodities have also tumbled, consigning the Bloomberg Commodity Spot Index to its biggest slump Monday in two months. Crude fell below $103 a barrel.
Treasuries rallied amid a steeper yield curve, reflecting haven’t demand and uncertainty about how far the Federal Reserve will hike rates to stem inflation.
A dollar gauge is at the highest level since 2020, while China’s economic slowdown amid Covid lockdowns is putting pressure on the yuan.
In cryptocurrencies, Bitcoin nursed a plunge, a retreat that’s become emblematic of the ebbing liquidity that’s curbing risk appetite.
China’s woes, a global wave of monetary tightening and the war in Ukraine are casting a pall over the world economy. In a semi-annual report, the Fed warned of deteriorating liquidity conditions across key financial markets.
“The number one investment adage right now is don’t fight the Fed, and I think the Fed is going up, they’re going to hike,” Victoria Greene, chief investment officer at G Squared Private Wealth, said on Bloomberg Television. “There is no where to hide right now. If you are looking for green on the screen it is very minimal, especially in the tech sector.”
Fed Bank of Atlanta President Raphael Bostic said he favors continuing to raise rates by half-point moves rather than anything larger. He said the odds for a 75-basis-point hike are low but added he’s taking nothing off the table.
Investors are awaiting the April US consumer-price index print on Wednesday to gauge whether inflation is peaking.
What levels are next for the pound and UK yields? Can the FTSE 100 remain a relative safe haven? This week’s MLIV Pulse survey is focused on UK assets, with the BOE last week giving the most pessimistic outlook of any major central bank. It takes only a minute and is anonymous, so share your thoughts in the survey by clicking here.
Here are key events to watch this week:
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Cleveland Fed President Loretta Mester, Atlanta Fed President Raphael Bostic, New York Fed President John Williams, Fed Governor Christopher Waller speak, Tuesday
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Atlanta Fed President Raphael Bostic speaks, Wednesday
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US CPI, Wednesday
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EIA crude oil inventory report, Wednesday
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San Francisco Fed President Mary Daly speaks, Thursday
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US PPI, initial jobless claims, Thursday
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University of Michigan consumer sentiment, Friday
Some of the main moves in markets:
Stocks
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S&P 500 futures fell 0.5% as of 9:27 am in Tokyo. The S&P 500 fell 3.2%
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Nasdaq 100 futures fell 0.6%. The Nasdaq 100 fell 4%
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Japan’s Topix index shed 1.9%
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Australia’s S&P/ASX 200 Index dropped 2.5%
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South Korea’s Kospi index declined 1.9%
currencies
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The Bloomberg Dollar Spot Index rose 0.1%
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The euro was little changed at $1.0560
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The Japanese yen was at 130 per dollar, up 0.2%
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The offshore yuan was at 6.7632 per dollar, down 0.1%
Bonds
commodities
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West Texas Intermediate crude was at $102.19 a barrel, down 0.9%
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Gold was at $1,852.83 an ounce
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