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06-2022

US Fed’s move, global stocks rise as investors look at inflation

US Fed's move, global stocks rise as investors look at inflation

TOKYO ( Associated Press) – Global stocks were trading higher on Friday as investors weighed in on the war in Ukraine and what the world’s central banks can do to keep inflation under control.

Benchmarks in Paris, London and Frankfurt rose after gains in Asian markets. Oil prices rose.

Investors are weighing the latest updates from the US Federal Reserve amid concerns about rising inflation. The Fed has signaled it is ready to raise interest rates and reduce its reserves of bonds and mortgage-backed securities to rein in the highest inflation in 40 years.

“Global appetite for risk in the short term is still uncertain, with hawkish central banks weighing in on sentiment. The situation between Ukraine and Russia remains persistent, with the market now only looking for a major breakthrough to adjust to the current pricing,” Andersen Alves at ActiveTrades said in a commentary.

France’s CAC 40 jumped 1.6% to 6,563.68 in early trade, while Germany’s DAX rose 1.6% to 14,295.95. Britain’s FTSE 100 rose 1.0% to 7,627.10. On Wall Street, the Dow Jones Industrial Average and S&P 500 futures rose 0.4%.

Japan’s benchmark Nikkei 225 fell in early morning trade but closed 0.4% higher at 26,985.80. South Korea’s Kospi rose 0.2% to 2,700.39. Australia’s S&P/ASX 200 rose 0.5% to 7,478.00. Hong Kong’s Hang Seng rose 0.3% to 21,872.01, while the Shanghai Composite also climbed 0.5% to 3,251.85, offsetting earlier losses.

The S&P 500 was up 0.4% and the Dow Industrials 0.3% on Thursday. The Nasdaq Composite rose 0.1% to 13,897.30.

The US central bank is backing away from low interest rates and began providing extraordinary support to the economy two years ago when the pandemic plunged the economy into recession. It already announced a quarter-percentage-point increase and expects to continue increasing rates throughout the year.

Traders are now pricing in an almost 80% chance that the Fed will raise its key overnight rate by half a percentage point at its next meeting in May. That’s twice the normal amount and something the Fed hasn’t done since 2000.

Rising inflation is putting economic growth at risk. business is raising prices Everything from food to clothing and this has put more pressure on consumers. Some companies have failed to compensate for the impact of inflation despite the increase in prices.

Wall Street is concerned about consumers eventually pulling back on spending because higher prices become too difficult to digest. Price hikes were responsible for increased consumer spending in March. Otherwise, the results revealed a pullback.

Rapid increases in interest rates could also affect corporate earnings growth, although it depends on how aggressive the Fed will be.

Russia’s invasion of Ukraine Concerns about inflation have also increased. Energy prices have been particularly volatile and gasoline prices have risen.

US benchmark crude rose $1.17 to $97.20 a barrel in electronic trading on the New York Mercantile Exchange. It fell 0.2% on Thursday, but remains up about 31% for the year. Brent crude, the international standard for pricing, rose $1.01 to $101.59 a barrel.

Investors got an encouraging update on the job market on Thursday. US Labor Department reports fewer Americans applied for unemployment benefits Layoffs remain at historically low levels as of last week.

In currency trading, the dollar rose from 123.97 yen to 124.10 yen. The euro rose from $1.0861 to $1.0864.

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