A mixed day in stock markets

Europe in the red, US equities climb

A mixed day that has seen European indices slip a little into the red, while Wall Street is enjoying better returns of more than 1% on Tuesday.

US equities are managing decent gains even as yields continue to head higher and traders are forced to consider the possibility of 75 basis point increases, something not seen in almost three decades.

That is what James Bullard has indicated, although even he – one of the more hawkish members of the FOMC – acknowledged that is not his base case at the moment. Still, the prospect of even more aggressive tightening can’t sit well with investors, despite the resilience they’ve shown in recent months.

It’s been a turbulent few months for stock markets, what with investors facing the prospect of higher inflation, faster rate hikes, lower growth and a prolonged war in Ukraine. And yet as we navigate through the early stages of first-quarter earnings season, we’re continuing to see the kind of resilience we often associate with stock markets, particularly those in the US.

And it comes as organisations like the IMF and World Bank lower growth and raise inflation forecasts for this year and next. Naturally, some countries are coming off worse than others, with the UK situation looking particularly bleak.

And with Russia intensifying its attacks and talks appear to have hit a brick wall, the prospect of a ceasefire being agreed upon looks increasingly unlikely any time soon. That should keep commodity prices high and further fuel inflation and interest rate concerns. The cost-of-living crisis is only going to get worse, it seems.

For a look at all of today’s economic events, check out our economic calendar: www.marketpulse.com/economic-events/

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Craig Erlam

Craig Erlam

Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam