USA: New York Stock Exchange falters in the face of the specter of recession
Hibapress
The New York Stock Exchange opened sharply lower on Monday, giving in to fears of a possible recession in the American economy and thus following the “disappointing” performance of other financial markets around the world.
The Dow Jones index fell by almost 3%, the Nasdaq by 5.50% and the S&P 500 by 4% during early trading while bond rates sank.
Explaining the performance, the New York Times said that signs of a slowdown in the U.S. economy sent investors into panic mode on Monday, adding that a wave of market selling that began last week had turned into a global rout.
The decline follows the release of a U.S. jobs report Friday that showed a sharp slowdown in hiring, with unemployment hitting its highest level in nearly three years.
The figures are fueling fears that the world’s largest economy could slide into recession, the publication notes, noting that this performance is rekindling the debate over the Federal Reserve’s (Fed) decision to keep interest rates unchanged instead of opting for a cut.
The next meeting of the American central bank will not take place for six weeks, too late for some observers who fear that a too late reaction will worsen the economic downturn.
To curb inflation, the Fed raised its rates to their highest level in 20 years, in the range of 5.25 to 5.50%, in order to force the American economy to slow down.
Outside the United States, Monday was marked by a free fall in Asian stock markets, with Tokyo suffering the biggest drop in points in its history. Monetary tightening by the Bank of Japan and the rise of the yen added to fears of a recession in the United States and sent the Tokyo Stock Exchange into decline.
In Europe, Paris fell by 1.41%, London by 2.25%, Frankfurt by 1.89%, Amsterdam by 2.63% and Milan by 2.07%.
Meanwhile, bitcoin, the risky asset weighed down by investor risk aversion, fell below $50,000 on Monday for the first time since February.
The world’s largest and best-known cryptocurrency fell 13.49% to $51,161.50, shortly after plunging more than 16% to $49,212.74, its lowest level in about six months.
