NEW YORK (awp international) – After the clear gains at the end of the week on Monday, the US stock market is showing signs of stagnation. The trading company IG rated the leading index Dow Jones Industrial a little higher at 32,217 points three quarters of an hour before the start of the stock market. On Friday, Wall Street had already managed to stabilize at the end of a very weak stock market week.
Recently, fears that the US Federal Reserve could stifle growth by significantly raising interest rates to combat high inflation have put pressure on share prices. According to the latest statements from those close to the Fed, investors are assuming that interest rate hikes that are even larger than those of 0.50 percentage points are not on the agenda. Nevertheless, the stock exchanges are still on a downward trend, as there is also a risk of an economic slowdown due to the ongoing supply chain problems on a global level and the Ukraine war.
Disappointing economic data from China fueled growth concerns at the beginning of the week. The strict restrictions imposed by the country’s zero-Covid strategy are slowing down the second-largest economy more than expected. Industrial production fell surprisingly in April. In addition, retail sales fell more sharply than analysts had predicted. In addition, investments in property, plant and equipment were weaker than forecast.
Economic data is unlikely to improve significantly in the coming months, wrote market analyst Michael Hewson of trading house CMC Markets UK. Because China is unlikely to change its zero-Covid policy given the vulnerability of its healthcare system to too many infections. This means that after a poor start to the year, the second quarter could be even worse.
Disappointing news also came from the USA. Sentiment in industrial companies in the US state of New York plummeted in May.
Among the individual stocks, the focus is on McDonald’s. The fast food chain is going out of business in Russia as a result of the Russian war against Ukraine. After more than 30 years in the country, the fast food chain wants to sell the branches to a Russian buyer. According to McDonald’s, the withdrawal from Russia will cost billions, including depreciation and foreign currency losses. The papers fell slightly in pre-market US trading./la/jha/
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