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Wall Street stocks followed the decline of European and Asian stocks on Friday, after the market was hit by the slowdown in global economic growth and Beijing’s regulatory crackdown on technology companies.
The Standard & Poor’s 500 Index fell 0.4% at lunchtime in New York, even though the blue chip index rose for the sixth consecutive month driven by strong corporate earnings and record low interest rates.
The technology-focused Nasdaq Composite Index fell further, down 0.6%. Quarterly performance The online leader Amazon failed to meet analyst forecasts.
The Wall Street sell-off was boosted by a large number of optimistic earnings results after the Stoxx Europe 600 index across the European continent closed down 0.5% and hit a record high one day ago.
According to data from Citigroup, in the second quarter, the earnings per share of STOXX 600 index companies increased by 159% year-on-year. The profits of S&P 500 index stocks increased by 97%.
But “this may be the highest point,” said Arun Sai, a senior multi-asset strategist at Pictet, referring to the pace of earnings growth after economic activity rebounded from the contraction triggered by the pandemic last year. He said that the financial market “has formed a narrative of peak economic growth and peak momentum.”
Data released on Thursday showed that U.S. economy Due to labor shortages and supply chain disruptions caused by the coronavirus, in the three months to June, the 6.5% annualized growth rate was lower than expected.
At the same time, China’s regulatory crackdown on large technology companies Broader strike Regarding private enterprises.
“This highlights the ambivalence of the leadership towards the market,” Capital Investment’s Julian Evans-Pritchard said. “We think this will have an impact on economic growth in the medium term.”
Hong Kong’s Hang Seng Index closed down 1.4% on Friday, while Mainland China’s CSI 300 Index fell 0.8%, after the sharp decline earlier this week eased.
Japan’s Topix Index closed down 1.4% after the number of Covid cases in Tokyo exceeded 3,000 for three consecutive days. South Korea’s Kospi 200 index fell 1.2%.
Investors’ more cautious sentiment on Friday stimulated a modest rise in safe-haven assets such as US government bonds, causing the 10-year US Treasury bond yield to fall by 0.04 percentage points to 1.23%.
The Fed bought about $120 billion in bonds every month during the entire pandemic to control the borrowing costs of households and businesses. This week it said the economy is “making progress”, but it is too early to tighten monetary policy.
“Tainized [of the bond purchases] It may be postponed, which in many ways is not bad news for the market,” said Anthony Collard, head of investment in the UK and Ireland at JP Morgan Private Bank.
The U.S. dollar, also considered a safe haven during periods of stress, rose 0.3% against a basket of major currencies.
Brent crude, the global oil benchmark, rose 0.4% to US$76.36 per barrel.
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