Australian shares are set to drop as Wall Street pulled back from a four-week winning streak and Europe panicked over gas supplies.
P 500 -1.8% Nasdaq -2.2%The local currency was flat at 68.73 US cents.The yield on the US 10-year note rose six basis points to 3.03 per cent.P 500 fell 2 per cent as of 1:39 p.m. Eastern and more than 90 per cent of stocks in the benchmark index posted losses. It finished in the red last week, breaking a four-week winning streak.
A majority of the more than 900 contributors, who include strategists and day traders, reckon inflation has topped out. Still, a whopping 84 per cent say it may take two years or longer for the Jerome Powell-led central bank to bring it down to the official long-term target of 2 per cent. In the meantime, American consumers will cut spending, and unemployment will climb over 4 per cent.
But the retreat of inflation from its peak isn’t likely to mark a return to the price stability of the recent past because of stark shifts in the world economy, according to a broad group of investors and strategists at firms including Pacific Investment Management Co., Capital Group and Union Investment.
Equities pushed toward their worst back-to-back rout in two months, following a surge that drove the SP 500 to its best start to a third quarter since 1932. Tech shares underperformed as Treasury 10-year yields topped 3 per cent. The Cboe Volatility Index, or VIX, soared. The move away from risky assets spurred further unravelling of the recent meme-stock frenzy. As the dollar gained, the euro succumbed to a two-decade low.
“The FTSE 100 is absolutely being helped by the pound slipping. Lot of things are painting a pessimistic picture for the UK consumer over the short to medium term which is why we have seen something of a knee jerk reaction today in these more consumer stocks,” David Jones, chief market strategist at Capital.com said.
The Dutch contract for next day delivery rose 47 euros, or almost a fifth, to a record high of 292 euros per megawatt hour by 1321 GMT
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