Folks, let’s cut to the chase: Friday was not a good day for global markets. We saw widespread selling pressure across Asia, Europe, and ultimately, the US. It feels like the market is finally waking up to the reality of persistent inflation and hawkish central bank policies.
Let’s break down the carnage. In Asia, the Shanghai Composite Index dipped 0.94%, closing at 3348.37. Shenzhen Composite wasn’t far behind, falling 0.85% to 10132.41. The tech-heavy ChiNext and STAR 50 indices felt even more pain, dropping 1.18% and 1.02% respectively. Hong Kong’s Hang Seng managed a slight uptick, but the Hang Seng Tech index couldn’t hold on, slipping by 0.09%.
Across the pond, European markets were hammered. Germany’s DAX took the biggest blow with a 1.51% drop, while France’s CAC 40 and the pan-European Stoxx 50 also suffered significant losses. Italy’s FTSE MIB was particularly brutal, shedding almost 2%.
And the US? The Dow, S&P 500, and Nasdaq all closed lower, ending a week of volatility on a decidedly downbeat note. The Nasdaq took a 1% tumble, leading the decline.
Let’s talk about what’s really happening here.
Firstly, inflation fears haven’t magically disappeared. Recent economic data still points to sticky price pressures, making further rate hikes more likely.
Secondly, the yield curve inversion remains a red flag. This historically accurate indicator suggests a potential recession is looming.
Thirdly, geopolitical uncertainty continues to weigh on investor sentiment. The situation in Ukraine and growing tensions elsewhere aren’t helping.
Finally, remember that markets hate uncertainty. And right now, uncertainty is in abundance. Don’t chase the dips blindly. Protect your capital, and be patient. A more significant correction may be on the horizon.
