Premarket: Central banks, earnings dampen stocks’ upbeat mood

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World stocks pull further away from 2-1/2 week highs touched earlier this week

World stocks pulled further away from 2-1/2 week highs touched earlier this week, with sentiment dampened by expectations for further rate hikes from big central banks, and with the focus fixed on the earnings season.

A note of caution set in after British inflation data on Wednesday -- showing inflation in the UK remains in double digits -- suggested the Bank of England and other big central banks may have to continue prioritising price stability over supporting economic growth. “That has weighed on sentiment. We’re also deep into earnings season now. The weak earnings growth, which is expected, is bringing to the forefront that not only are central banks still tightening but economic growth is disappointing and now weighing on company profits.”

Elon Musk doubled down on the price war he started at the end of last year, saying Tesla would prioritise sales growth ahead of profit margins in a weak economy. World stock markets have bounced back from sharp falls in March as banking sector strain roiled investors, who bet the turmoil would mean global rate hikes would soon end.“Global central banks’ narrow focus on combating inflation has gotten more complicated as they are now faced with the added task of maintaining financial stability,” said Thomas Poullaouec, head of multi-asset solutions APAC at T. Rowe Price.

 

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