Investors Back Out: Interest Rate Concerns Depress Buying Mood on Wall Street

Investors are holding back
Interest rate concerns dampen buying mood on Wall Street

Will the US Federal Reserve Raise Interest Rates Soon? Uncertainty is causing moderation in US markets. General Mills, on the other hand, is on the rise. The food producer is among the winners of the day.

The speculation about the further course of the US central bank’s monetary policy does not give rise to a buy-in mood on Wall Street. US stock indices have been changing. of the Dow Jones Index defaults gained 0.3 percent to 31,029.31 points. The one with a high technological content Nasdaq it was just changed to 11,177.89 points and the wide S&P 500 it lost 0.1 percent to 3,818.83 points.

S&P 500
S&P 500 3,762.66

Ahead of rising inflation, some Fed officials recently supported further rapid interest rate hikes and downplayed fears that the economic engine would stall. With his statements at a central bank conference in Portugal, US Federal Reserve Chairman Jerome Powell has again signaled that he wants to fight inflation with all his might.

The euro exchange rate is weakening

“The problem is pushing investors,” said portfolio manager Robert Pavlik of asset manager Dakota Wealth Management. “They don’t take it easy, that’s for sure. Right now, when you have these kinds of negative confluences coming together all at once, it keeps people on the sidelines, unwilling to step in and become buyers.”

Euro / US dollar
Euro / US dollar 1.04

Investor expectations for aggressive rate hikes in the US strengthened the US dollar. of the Dollar index, which measures the world’s major currency in relation to other major currencies, rose half a percentage point to 105.03 points. of the EUR it was down 0.6 percent to $ 1.0450.

Investors in European bond markets grabbed after a surprisingly low June price hike in Germany. The inflation rate was 7.6% yoy, below the previous month and also below the 8.0% forecast by analysts. “This is the relaxation we hoped for,” said Thomas Altmann of wealth manager QC Partners. The yield on the 10-year federal bond fell ten basis points to 1.53%. Earlier in the week, inflation concerns had pushed yields higher. The ten years US-Treasury it returned 3.113 percent from 3.207 percent on Tuesday.

General Mills on the rise

Inflationary pressure and a deteriorating economy are putting central banks in trouble. In the fight against inflation, the European Central Bank (ECB) intends to raise the benchmark interest rate for the first time since 2011 and to do so again in September. In mid-June, the Fed raised key interest rates more sharply than in 1994 and offers the prospect of further rapid hikes. This increases the cost of borrowing for both consumers and businesses, which is likely to hurt consumption and investment. This, in turn, could add to the already weakening economy.

General Mills
General Mills 71.20

Among the biggest losers were the shares of Bed, bathroom and beyond with a minus of over 21 percent. The home furniture maker scared investors with similar sales declines in the quarter. Also, CEO Mark Tritton takes off his hat. On the other hand, better than expected sales of General Mills. Shares of the snack bar and breakfast cereal maker were up more than five percent.

He withdrew after a positive evaluation by the analyst Goldman Sachs 1.7 per cent. BofA Global Research has updated the titles to “Buy” from “Neutral”. The bank is well positioned in a deteriorating global economy to outperform the industry average, he said.

Leave a Comment