Fears of a recession are once again driving markets

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Once again, the climate of uncertainty among investors: signs of economic weakness emerged from US data. Is the recession really coming? Markets feel a slowdown.

THE markets Asian stocks are looking to close higher, however, in a climate that has once again become very uncertain.

Weak US consumer data fuels fears recession and pushed investors into safer assets like bonds, while the Japanese yen soared on doubts about Japan’s political commitments. Bank of Japan.

Readings updated on Wednesday, January 18th showed that US consumers are losing steam and consumers investments of businesses are in decline, raising concerns that the economy may be slipping into a recession.

THE producer prices have fallen the most since the start of the pandemic, and retail sales have fallen the most in a year. That didn’t deter officials. Federal Reservewhich reiterated the need to continue to tighten monetary policy.

Closest recession? What the markets suggest

Asia tries to recover at the close: the Japanese Nikkei stalls down 1.14%, while the Chinese indices Shenzhen and Shanghai register gains of 0.77% and 0.49%. Hong Kong loses 0.42%.

Overnight, the US S&P 500 lost 1.6% after data showed the US manufacturing production collapsed last month and retail sales are down more than they have been in a year.

“The decline in retail spending and industrial production raises the theme of economic downturn it’s from recession in 2023and dismisses the soft landing narrative that has dominated markets since January.”said Tapas Strickland, head of market economics at National Australia Bank.

Microsoft’s announcement of 10,000 layoffs and aggressive comments from Cleveland Fed President Loretta Mester and St. Louis, James Bullard added to the gloomy sentiment, with both officials expecting interest rates above 5% this year.

Meanwhile, the global bond sales so far this year, they have reached record highs as companies and governments around the world turn to investors to raise hundreds of billions of dollars in capital.

Elsewhere, oil fell for a second day on growing fears of a US recession and figures pointed to another rise in inventories.

Source: Money It

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