Stock markets are reeling as investors react to rising inflation

On Friday, yields on two-year Treasury paper rose by a quarter of a point to 3.06 per cent, while yields on 10-year notes rose by a tenth of a point to 3.16 per cent.

Ultimately for investors, the concern is how higher prices and rising borrowing costs will affect consumer spending and corporate profits. Yung-Yu Ma, chief investment strategist at BMO Wealth Management in the United States, said the absorption of costs would affect the company’s profits, but passing them would worsen the problems in the economy.

“It’s a very difficult moment,” he said. Ma said. Most companies are unlikely to maintain their profit margin Increasing energy costshe said.
Stock Market Analysts, Mr. Ma said they were developing “mostly optimistic” forecasts for the said profit, which would be revised in the coming months and eventually reflected in lower stock prices.

This week, Target’s stock plummeted following that Lowered its profit forecast For the second time in three weeks, changes in inflation and consumer habits ate into its margins, leaving much unsold inventory that said it was trying to sell at a discount.

The S&P 500 is now down 18.7 percent from its January 3 record, bringing it back to bear-market territory – signaling a radical shift in investor sentiment on Wall Street. The code briefly sank into bear territory Last monthBefore recovering to close slightly above that psychologically significant level.

Phil Orlando, chief stock strategist at Federated Hermes, said in an interview that the market is expected to fall further, 10 percent lower than current levels in the summer. He prefers so-called value-added stocks to development stocks such as energy, finance and healthcare industries, technology companies because they have cheaper ratings and are more promising in this environment.

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