The Dow Jones industrial average fell more than 530 points, or 1.7 percent shortly after trading started Thursday, while the broader S&P 500 index lost 1.6 percent and the tech-heavy Nasdaq shed 1.5 percent. Stocks have been getting hammered through much of 2022, with the Dow off more than 15 percent year to date.
Disappointing bank earnings contributed to Thursday’s sell off. JPMorgan Chase shares fell 3.2 percent after the big bank posted a 28 percent drop in second-quarter profit, citing the need to set aside more for bad loans. Morgan Stanley missed revenue and profit forecasts.The runaway inflation that has weighed heavily on investors for months worsened in June, according to the latest consumer price index. The unexpectedly high 9.
“The pipeline is filled with inflation that will eventually move up to the consumer level,” wrote Chris Rupkey, chief economist at FWDBonds. “The Fed needs to fight the inflation war on two fronts at the producer level and consumer level.” Central bank policymakers have raised interest rates three times this year, including by a 0.75 percentage point in June, in a bid to tamp down inflation. The Fed had been widely expected to raise its key rate by a 0.75 percentage point later this month.
This week. Canada became the first G7 nation to raise rates by 100 basis points, and there’s now speculation that the U.S. could follow suit. If it does , it would be the largest one-time increase since the Fed began announcing rate hikes in the early 1990s.
Two major factors affecting most the world’s economy “war” and “pandemic”. It will take a while for many countries to get back to their feet as the whole world was shut down for more than 2yrs. The effect of this will be realized 2 or 3 yrs later. Inflation is just the beginning.
But hey - 10% for the Big Guy
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