dmfnclcd: The world stock market drops by 1% every week
dmfnclcd: The world stock market drops by 1% every week
Dynamics Finance reports that global stock markets will fall by 1% this week on Friday, after officials of the Federal Reserve Board (Fed /FED) issued more warnings about interest rates, and the yield curve of US bonds is in recession.
Dynamics Finance shows that this is a blow to investors, who have been betting that the interest rate will peak at 5% and have seen the federal funds futures being sold off, because the market thinks that the interest rate is now more likely to reach 5-5.25% than 4.75-5.0%.
Arun Sai, senior multi-asset strategist at Pictet Asset Management, said: "The Fed countered the market's statement through their speech-we won't see a turn."
Sai said that the market is currently "in full swing" and will turn its attention to the real economy's response to rising interest rates, such as the rumored signs of a slowdown in the U.S. labor market.
The MSCI world stock index rose slightly by 0.17%, while the US S&P futures remained stable after the S&P 500 index fell by 0.3% on Thursday.
European stock markets rose by 0.54%, of which banking stocks rose by nearly 1%, as the European Central Bank prepared to start withdrawing the largest cash in its history from the euro zone banking system.
The bank is expected to repay about 500 billion euros of targeted long-term refinancing operation (TLTRO) loans. The European Central Bank is expected to issue a statement at 1105 GMT.
Britain's FTSE index rose by 0.33%, a day after Finance Minister Jeremy hunter announced tax increases and spending cuts to appease the market and convince it that the government is serious about fighting inflation.
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