Rate hike market crash

Share to Twitter Share to Linkedin Topline Stocks fell slightly on Wednesday as a growing number of major Wall Street firms warned that the likelihood of a recession has risen sharply, while Federal Reserve Chair Jerome Powell pledged that the central bank is “ strongly committed ” to raising rates until inflation moderates. Key Facts Markets finished lower in choppy trading: The Dow Jones Industrial Average fell 0.2%, less than 100 points, while the S&P 500 lost 0.1% and the tech-heavy Nasdaq Composite 0.2%. The Dow was down by as much as 400 points but stocks pared back losses following comments from Fed Chair Powell, who said the central bank is “determined to take the measures necessary to restore price stability” and that “ongoing rate increases will be appropriate.” Citigroup became the latest Wall Street bank to increase its recession odds, meanwhile, forecasting a 50% chance of a downturn as consumer demand “looks to be … [Read more...] about Stocks Fall After Powell Pledges More Big Rate Hikes To Combat Inflation

Representative image The market valuation of the top-10 most valued firms plunged by a whopping Rs 3.91 lakh crore last week, in tandem with a steep sell-off in equities, with TCS and and Reliance Industries taking the biggest hit. Past week, the BSE Sensex plunged 2,943.02 points or 5.42 per cent, while the NSE Nifty declined 908.30 points or 5.61 per cent. Markets have been extremely bearish of late amid rate hikes by global central banks, unrelenting foreign fund outflows and jump in crude oil prices. The market valuation of the 10 most valued domestic firms eroded by Rs 3,91,620.01 crore last week. From the top-10 firms, Tata Consultancy Services (TCS) was the top loser, as its market valuation tumbled Rs 1,01,026.4 crore to stand at Rs 11,30,372.45 crore. The market capitalisation (mcap) of Reliance Industries Ltd (RIL) tanked Rs 84,352.76 crore to reach Rs 17,51,686.52 crore. The valuation of Infosys eroded by Rs 37,656.62 crore to Rs 5,83,846.01 crore and that of … [Read more...] about Market crash: Top 10 firms lose Rs 3.91 lakh crore in m-cap; TCS, Reliance biggest laggards

The world's central bank umbrella body, the Bank for International Settlements (BIS), has called for interest rates to be raised "quickly and decisively" to prevent the surge in inflation turning into something even more problematic. The Swiss-based BIS has held its annual meeting in recent days, where top central bankers met to discuss their current difficulties and one of the most turbulent starts to a year ever for global financial markets. Surging energy and food prices mean inflation in many places is now its hottest in decades. But the usual remedy of ramping up interest rates is raising the spectre of recession, and even of the dreaded 1970s-style "stagflation", where rising prices are coupled with low or negative economic growth. "The key for central banks is to act quickly and decisively before inflation becomes entrenched," Agustín Carstens, BIS general manager, said as part of the body's post-meeting annual report published on Sunday. Carstens, former head of … [Read more...] about Banking body urges decisive wave of global rate hikes to stem inflation

Share to Twitter Share to Linkedin Topline Stocks have struggled for direction since falling into a bear market earlier this month amid looming recession fears, but history shows that the market’s rapid pace of decline this year could actually be a positive sign—with stocks set to rebound if the broader economy avoids a downturn. Key Facts The S&P 500 officially fell into a bear market on June 13, closing down more than 20% from its record high in January; and although the benchmark index bounced back above that threshold last week, stocks have been falling and pushing markets lower once again. “No two bear markets are exactly alike,” according to Bespoke Investment Group; that said, over half of bear markets since World War II have preceded a recession but those that did not lead to an economic downturn tended to last for a shorter time, on average. “The good news is that the bull market took just 161 calendar days to go from its peak … [Read more...] about Stocks Are Crashing But History Shows This Bear Market Could Recover Faster Than Others

Share to Twitter Share to Linkedin Topline Stocks fell in volatile trading on Thursday, wrapping up their worst first half of a year since at least 1970 as the S&P 500 remains in bear market territory, with investors continuing to sell off shares amid rising recession fears sparked by surging inflation and rate hikes from the Federal Reserve. Key Facts Stocks finished lower: The Dow Jones Industrial Average fell 0.8%, over 200 points, while the S&P 500 lost 0.8% and the tech-heavy Nasdaq Composite 1.3%. With the second quarter wrapping up on Thursday, stocks posted their worst three-month period since the first quarter of 2020, when Covid pandemic lockdowns sent the U.S. economy into a brief recession. The stock market also closed out its worst first half of a year in over 50 years, as surging inflation, rate hikes from the Federal Reserve and Russia’s war in Ukraine have all led to rising recession fears. With the S&P … [Read more...] about Stocks Close Out Worst First Half Of A Year Since 1970

Share to Twitter Share to Linkedin Topline As a growing number of investment banks and company chiefs warn that the likelihood of a recession is increasing, analysts at Morgan Stanley are telling clients that the stock market—despite reeling from a steep selloff in recent weeks—has plenty of room to fall before hitting levels consistent with recession-era lows, which would be especially bad for cyclical industries like travel and hospitality. Key Facts Despite major stock indexes plunging more than 20% below recent highs, markets are still only down by about 60% of the average drawdown compared with previous recessions (which denote two consecutive quarters of negative GDP growth), Morgan Stanley analysts told clients in a Tuesday note. As the Federal Reserve works to combat decades-high inflation with interest rate hikes that will likely stunt economic growth, a recession “is no longer just a tail risk,” analysts led by Michael Wilson wrote, … [Read more...] about Stock Market Could Crash Another 20% If U.S. Plunges Into Recession—These Industries Are Most At Risk

Share to Twitter Share to Linkedin Topline Economists at S&P Global Ratings on Monday warned the likelihood of a recession over the next year is increasing as the Federal Reserve continues its most aggressive economic tightening cycle in decades—becoming the latest experts warning about the potential implications of rising interest rates, which help ease prices at the expense of economic growth. Key Facts In a research note published Monday, a team of economists led by S&P’s Beth Ann Bovino said aggressive Fed policy spurred by ongoing price spikes will usher in low economic growth this year and potentially risk a recession, defined as two consecutive quarters of negative gross domestic product. S&P forecasts that U.S. GDP will grow at an annual rate of 2.4% this year and 1.6% next year—down from forecasts last month calling for growth of 2.4% and 2%, respectively. Even the labor market, which has posted a remarkably strong … [Read more...] about Unemployment Will Rise And ‘Extreme’ Price Pressures Continue As Fed Hikes Risk Recession, S&P Warns

Share to Twitter Share to Linkedin Topline Amid the market’s worst first half of a year in over five decades, tech and cruise line stocks have been among the worst performers in the S&P 500, while energy, healthcare and consumer companies have all seen shares outperform despite rising recession fears. Key Facts The benchmark S&P 500 index is down more than 21% this year, officially falling into bear market territory earlier this month: Nearly 400 stocks in the index are negative so far in 2022, while roughly 150 stocks have fallen by more than 20%. The worst-performing stock this year is streaming giant Netflix, which has plunged more than 70%, followed by e-commerce company Etsy (down 66%) and orthodontics company Align Technology (down 63%). With the Federal Reserve scrambling to raise interest rates in a bid to combat high inflation, tech stocks have been particularly hard-hit in 2022: Digital payments giant PayPal is down more … [Read more...] about Warren Buffett’s Favorite Stock Soars, Netflix Fumbles: These Are The Best And Worst Performing Stocks Of 2022

Share to Twitter Share to Linkedin Capital One’s stock (NYSE: COF) has lost approximately 27% YTD, as compared to the 20% drop in the S&P500 over the same period. Notably, the stock market has witnessed selling pressure over the recent months due to record-high inflation figures, aggressive interest rate hikes, and the Russia-Ukraine crisis. That said, at its current price of $106 per share, the stock is trading 37% below its fair value of $168 – Trefis’ estimate for Capital One’s valuation . The bank announced on 27 June that it has successfully cleared the Federal Reserve’s 2022 Comprehensive Capital Analysis and Review (“CCAR AR ”) stress test process. The exercise is conducted every year by the Fed to assess, regulate, and supervise large banks and financial institutions. While the company managed to pass the stress test, its Stress Capital Buffer Requirement (“SC SC B”) increased from 2.5% to 3.1% (effective October 1, 2022). The … [Read more...] about Where Is Capital One Stock Headed?

- A + A HONG KONG (June 22): A world economy already contending with raging inflation, stock-market turmoil and a grueling war is facing yet another threat: the unraveling of a massive housing boom. As central banks around the globe rapidly increase interest rates, soaring borrowing costs mean people who were already stretching to buy property are finally reaching their limits. The effects are being seen in countries such as Canada, the US and New Zealand, where once-hot residential real estate markets have suddenly turned cold. It’s a sharp reversal from years of surging prices fueled by rock-bottom mortgage rates and government stimulus, along with a pandemic that popularized remote work and sent homebuyers on the hunt for bigger spaces. An analysis by Bloomberg Economics shows that 19 OECD countries have combined price-to-rent and home price-to-income ratios that are higher today than they were ahead of the 2008 financial crisis — an indication that prices have … [Read more...] about World’s bubbliest housing markets are flashing warning signs