U.S. treasuries rise, U.S. stocks slide on recession worries - BNN Bloomberg

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Treasuries rallied and equities declined as growing signs of a global economic slowdown raised investor concern that the start-of-the-year rally in risk assets may have gone too far.

Contracts on the S&P 500 Index dropped 0.4 per cent after the benchmark slumped the most in a month Wednesday amid weaker-than-expected economic data. Nasdaq 100 futures also lost 0.4 per cent. Europe's Stoxx 600 gauge halted a six-day rally. The 10-year Treasury yield declined to the lowest level since September. A selloff spread across global markets, from Japanese shares to oil contracts.

A rally driven by optimism over China's economic reopening is beginning to fizzle as data releases signal a decisive slowdown in the rest of the world. Reports from the U.S. showed declines in consumer demand and business investment, boosting the probability of a recession in the world's largest economy. That, however, didn't deter Federal Reserve officials from reaffirming the need for tighter monetary policy.

Europe's equity benchmark snapped the longest streak of gains since November 2021, dragged by energy and mining stocks. Australian bonds rose after the nation's employment levels unexpectedly fell in December. New Zealand's dollar fell 0.7 per cent amid news Prime Minister Jacinda Ardern will step down next month.

In the U.S., Wednesday's releases showed producer prices and retail sales fell, while business equipment production slumped. A decline in factory output wrapped up the weakest quarter for manufacturing since the onset of the pandemic. Even after such a string of poor data, Fed officials repeated calls for more interest-rate hikes.

 

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