FT: US stocks sink as strong data support further monetary tightening

Money bag with up and down arrows. A sharp change in prices. Destabilization of stock markets. Speculation, speculators. Monopolization of the market and interruptions in the supply of goods, services

22/12/2022

THE FINANCIAL TIMES reports:

Global stocks fell on Thursday after better than expected US economic data bolstered the Federal Reserve’s belief that further monetary tightening is required.

The S&P 500 fell 2 per cent in afternoon dealings after US third-quarter gross domestic product growth was revised higher to a 3.2 per cent annualised rate, from 2.9 per cent in November. Weekly initial jobless claims numbers were also lower than expected at 216,000, below the 222,000 forecast by economists. The tech-heavy Nasdaq Composite index slid 2.8 per cent.

The upward revision in growth “[confirms] the Fed’s assertion that the real economy is on strong enough footing to endure restrictive monetary policy for an extended period of time,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets.

The fresh bout of selling comes in the penultimate week of a year that has been dominated by the Fed’s attempt to tamp down inflation with large rises in borrowing costs. The S&P 500 is down by around a fifth for 2022, leaving Wall Street’s blue-chip share index on track for its worst year since the 2008 financial crisis, according to Refinitiv data. Bond markets have also sustained a powerful blow, leaving investors with few corners to seek refuge…

The full story is here.

Related content: “Surprise US GDP Revisions Blindside Policy Doves“.

In early afternoon trade (EST): Dow -2.2%; S&P -2.8%; Nasdaq Composite -3.5%.

Happy holidays!