Updated at 9:58AM EST
US stocks fell strongly on Thursday, while the dollar rebounded from its worst day in two and a half years, as investors continue to grapple with extreme volatility in the bond and currency markets heading into the final trading days of a tough quarter for global stocks.
As the impact of yesterday’s exceptional intervention from the Bank of England fades, and investors remain focused more on safety than risk amid the broader market turmoil, the US Dollar Index rebounded 0.22% higher in overnight trading, holding it at 112.854 against its global currency peers.
US Treasury yields were also on the rise, with benchmark 10-year notes adding about 8 basis points from yesterday’s close – which saw the biggest one-day drop since 2011 – to trade at 3.83% during European trading hours.
The decline in bond and currency markets reflects not only concern about the near-term pace of inflation in the world’s largest economies, but also the impact on projected growth from the central bank’s efforts to tame it.
Indeed, the European Central Bank is signaling a 75 basis point rate hike at its next policy meeting in October, while the Bank of England is likely to follow suit as the pound’s historical decline adds to the costs of energy and food imports and fuels inflation. In the fifth largest economy in the world.
In the US, prospects for a jumbo fourth-straight rate hike from the Fed remain compelling, even though the now-defunct Atlanta Fed’s GDP forecasting tool indicates that growth has slowed to just 0.3% during the current quarter.
Amazon (AMZN) In fact, it may have added to near-term inflation fears when it unveiled a billion-dollar plan to raise wages for warehouse and transportation workers heading into the holiday season, just days after the target. (TGT) It said it would hire about 100,000 seasonal employees with salaries between $16 and $24 an hour.
In fact, weekly claims for unemployment benefits fell by 16,000 to 193,000 during the period ending September 24, which is a stronger-than-expected non-farm payroll report on October 7.
However, the sluggish pace of growth in the US, coupled with declining discretionary spending and declining consumer confidence, is likely to dampen earnings growth when the third-quarter reporting season begins early next month with updates from the banking sector.
S&P 500 collective earnings, which grew about 8.3% during the three months to June, are likely to rise just 4.6% from a year ago to $465.9 billion during the third quarter, according to Refinitv forecasts. Ditch the energy sector, and corporate earnings are likely to fall 1.9%.
Meanwhile, shares in Europe were back in the red on Thursday, with the region-wide Stoxx 600 Index down 1.7% in mid-Frankfurt trading after the headline German inflation reading showed coordinated consumer prices rising a record 10.9% in September.
Britain’s FTSE 100 index fell 1.6% while the pound rose to 1.0984 against the US dollar.
On Wall Street, the S&P 500 is down more than 72% for the month, and it fell another 56 points in the opening hour of trading while the Dow Jones Industrial Average returned 430 points from last night’s rally. The technology-focused Nasdaq fell 265 points.
Apple company (AAPL) Shares were the notable driver early on, dropping another 3.8% after analysts at Bank of America lowered their rating and price target on the world’s most valuable tech company, citing fading consumer demand and weak reception for the new iPhone 14.
Carmax (KMX) Shares fell 22.1% after the auto-buying site reported lower-than-expected earnings in the second quarter amid a dip in total sales pointing to weakness in the used-car market.
nike (NKE) Stocks were also in focus as they fell 1.75% ahead of the sportswear giant’s first-quarter earnings after the closing bell.
Analysts expect the group to keep overall revenue largely flat compared to last year, at $12.27 billion, but it reported a nearly 21% drop in diluted earnings, to 92 cents per share, as higher labor, input and transportation costs pressured profit margins. total.