Stocks slump worldwide as allure grows to buy a Treasury bill and chill

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Wall Street is slumping again as stock prices fall worldwide on expectations that U.S. interest rates will stay high well into next year.

Despite more than a year of widespread warnings that a recession was near, America’s economy is, if anything, accelerating.He sees the Fed on a path where it can “simply wait until something goes wrong and then deliver either small cuts in response to a smaller growth threat, similar to the insurance cuts of 2019, or substantial cuts in response to a full recession,” he wrote in a report.

High rates slow the economy and raise the pressure across the financial industry. Earlier this spring, they helped lead to three high-profile collapses of U.S. banks. They also hurt prices for all kinds of investments, but they often hit hardest on those bid up on hopes for big growth far out in the future. That’s why tech stocks often swing in particular with expectations for rates.after it said it would buy Splunk, a cybersecurity company, for roughly $28 billion in cash. Cisco fell 3.

On the winning side of Wall Street, FedEx rose 5.4% after it reported stronger profit for the latest quarter than analysts expected.. The expectation had been for another rate hike, but a surprising report this week showed a drop in U.K. inflation.Japan’s Nikkei 225 fell 1.4%, South Korea’s Kospi dropped 1.7% and France’s CAC 40 lost 1.4%.

New Zealand’s benchmark index fell less than 0.1% as figures released Thursday by Statistics New Zealand indicated the economy expanded at a 3.2% annual pace in the April-June quarter. Finance Minister Grant Robertson said the economy was turning a corner and growing at twice the rate predicted by economists.

 

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