By Ketki Saxena
Investing.com – North American stocks slipped this morning as investors digested yesterday’s red-hot U.S. inflation data (9.1%) and PPI data which rose more than expected implying robustness in the economy, both of which reinforce the case for an aggressive move from the Federal Reserve later this month.
Jobless claims however, which rose to their highest since November, and for a second week straight, indicate a cooling in the economy but seem unlikely to deter a central bank that believes the risk of recession is a lesser even than entrenched inflation.
The Bank of America (NYSE:BAC) is now forecasting a “mild recession this year” in the U.S. this year, a sentiment reinforced by J.P Morgan CEO Jamie Dimon this morning who believes the Federal Reserve’s unprecedented efforts to tame inflation are certain “to have negative consequences on the global economy.”
The investment bank released less than stellar earnings this morning, disappointing on both earnings and revenue, and announcing news of a share-buyback suspension in a bearish sign that the bank is buckling down tighter times ahead.
European stocks also closed lower on Thursday afternoon as global markets digested the latest U.S. inflation and PPI data, and ahead of growth forecasts from the European Commission this morning, also expected to predict a cooling Eurozone economy.
The dire mood in the U.S. and European trading follows a relatively positive Asian session following Singapore’s monetary policy tightening in an off cycle move, and Australia’s announcement of falling unemplyoment.
Currencies: The dollar continued to dominate against a basket of currencies, rising to g new 24-year highs against the yen and above parity with the Euro, as investors bet on aggressive moves by the Federal Reserve.
Commodities: Oil prices continued to slide as investors worry about slowing economic growth, and an outsized Fed rate hike driving demand destruction. Oil is also being pressured by rising Covid cases in China, and the prospect of lower demand.
Gold also remained near 18-month lows as U.S. yields rose and the dollar strengthened, while metals saw broad-based losses on worries of declining industrial output as the global economy cools.