Stocks dipped yesterday after Apple’s plans to slow hiring highlighted concerns that aggressive monetary tightening to tackle inflation portends an economic downturn.
An Asian equity gauge was dragged down by a drop in technology stocks in Hong Kong and a retreat in China, which is contending with rising Covid infections and deepening property-sector turmoil.
US futures inched up in the wake of another reversal for the S&P 500 on Monday. The index erased a 1 percent gain and ended lower on Apple’s intention to moderate some hiring and spending. European contracts were in the red, sapped by concerns about natural-gas supplies from Russia.
The dollar gauge fluctuated near a record high and Treasuries advanced, reflecting expectations for a short, sharp Federal Reserve interest-rate hiking cycle that gives way to cuts next year to shore up growth.
Corporate updates such as Apple’s are helping markets to calibrate the risk of recession. Signs that high inflation and monetary tightening are squeezing consumers and employment could feed into worries that an equity revival since mid-June is merely brief respite in a bruising bear market.
“We’re in a period over the next couple of weeks where corporate headlines are really going to drive market activity,” Anthony Saglimbene, global market strategist at Ameriprise Financial, said on Bloomberg Television. The focus is on how labour and input costs and demand are shaping the outlook, he said. In Europe, concerns are intensifying about gas supplies from Russia amid a standoff over its invasion of Ukraine. The European Union is preparing to tell members to cut gas consumption “immediately” to preserve supplies for winter, according to a report.
Crude held above US$100 a barrel and will likely stay there for the rest of the year, according to Iraq’s energy minister. Ether was among the leaders of a cryptocurrency rally.
Overall global market volatility is a sign of the struggle “to gauge whether we are seeing, one, peak inflation and two, peak interest rates,” Lale Akoner, strategist at BNY Mellon Investment Management, said on Bloomberg Television. She expects the US dollar to remain higher for the next six months. —Bloomberg