NEW YORK – Global stocks ended trading on Thursday as markets weighed strong economic data from the United States against concerns over monetary policy tightening, while the dollar hit a 20-month high against the euro.
Stock markets continued to perform intermittently, with European stocks opening lower but ending higher and Wall Street stocks doing the opposite.
Investors are still adjusting to the new world of tighter monetary policy, most recently outlined on Wednesday by Federal Reserve Chairman Jerome Powell, said Tom Cahill of Ventura Wealth Management.
“I think the market is buying into the idea that the Federal Reserve won’t be as quick to prop up the market as it has been in the past,” Cahill said.
On Wednesday, Powell announced that the Fed plans to raise interest rates in March, telling reporters that the recovery in the world’s largest economy is strong enough that it can withstand higher borrowing costs.
Powell’s press conference contained no major surprises, but several market watchers described it as more hawkish than expected.
“Powell effectively admitted that the Fed was behind the curve and now needed to pull itself together to bring inflation back to more acceptable levels. If that means disrupting financial markets, then so be it,” said Fawad Razaqzada , market analyst at ThinkMarkets.
European indices had mostly retreated in the morning session after heavy losses in Asia. But the mood changed after the US Commerce Department released data showing the world’s largest economy grew 5.7% in 2021, its fastest rate since 1984.
Wall Street also bounced on the growth data, but then spat on the latest mid-term reversal.
One of the biggest movers was Tesla, which plunged 11.6% despite record annual profits on rising sales, after chief executive Elon Musk warned that supply chain problems would persist until further notice. ‘in 2022.
Analysts also expressed disappointment that Musk didn’t provide any fresh details on an upcoming generation of vehicles.
For the second day in a row, the dollar rallied strongly against the euro and other major currencies, hitting a 20-month high against the euro as the market digests the Fed’s pivot.
“The Fed is on track to raise rates in March and could possibly do so by a bold 50 basis points given the stronger base of the US economy from its previous starting point entering a hike cycle. rates,” said Western Union Business analyst Joe Manimbo. Solutions.
“The specter of wider interest rate differentials between the euro and the dollar exposes the former to greater downside risk.”
Key figures around 21:40 GMT
New York – Dow: DOWN less than 0.1% to 34,160.78 (closing)
New York – S&P 500: 0.5% drop to 4,328.51 (closing)
New York – Nasdaq: DOWN 1.4% to 13,352.78 (closing)
London – FTSE 100: UP 1.1% to 7,554.31 (closing)
Paris – CAC 40: UP 0.6% to 7,023.80 (closing)
Frankfurt – DAX: UP 0.4% to 15,524.27 (closing)
EURO STOXX 50: UP 0.5% to 4,184.97 (closing)
Tokyo – Nikkei 225: 3.1% decline at 26,170.30 (closing)
Hong Kong – Hang Seng Index: DOWN 2.0% to 23,807.00 (closing)
Shanghai – Composite: DOWN 1.8% to 3,394.25 (closing)
Euro/dollar: DOWN to $1.1147 vs. $1.1240 Wednesday night
Pound/dollar: DOWN to $1.3381 from $1.3463
Euro/pound: DOWN to 83.27 pence vs. 83.49 pence
Dollar/yen: UP to 115.36 yen from 114.64 yen
North Sea Brent: 0.6% down to $89.34 a barrel
West Texas Intermediate: 0.8% drop to $86.61 a barrel
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