Global Shares Trading Mixed; Investors Fret At Fed Rate Hikes

Global shares were mixed Monday, May 16, 2022, as investors eyed surging energy costs and prospects for interest rate hikes in the US, Yuri Kageyama reported for the Associated Press (AP).

Photo Insert: European benchmarks were trading mixed, with shares up in France and Germany but down in Britain.

European benchmarks were trading mixed, with shares up in France and Germany but down in Britain. Stock moves were similar earlier in the day in Asia, where benchmarks finished higher in Japan and Australia but fell in South Korea.

Shares rose in Hong Kong but declined in Shanghai. France’s CAC 40 declined 0.4% in early trading to 6,336.07, while Germany’s DAX shed 0.5% to 13,963.69. Britain’s FTSE 100 was up less than 0.1% at 7,421.33. US shares were set to drift lower with Dow futures down 0.1% at 32,085.00. S&P 500 futures fell 0.3% to 4,006.00.

Some analysts worry that if the US Federal Reserve raises interest rates too quickly, or by too much, that could set off a recession. A slowdown in the US would almost certainly hurt the Asian region, which exports and manufactures goods for the US.

The Fed has said it will continue to raise interest rates to temper rising inflation. The benchmark short-term interest rate was at a record low of near zero during much of the coronavirus pandemic.

“Many others had spotted recession risk out in 2024, but we have been aggressive from the outset in our forecast for a potential US recession this year,” said Clifford Bennett, chief economist at ACY Securities.

A Bank of Japan report said wholesale inflation rose a record 10% in April from the previous year, the highest since comparable records began in 1981.

Japan’s consumer prices have not risen at such a brisk pace in recent months. April consumer prices data are due out later this week. In other regional trading, Australia’s S&P/ASX 200 edged up 0.3% to 7,093.00. South Korea’s Kospi fell 0.3% to 2,596.58. Hong Kong’s Hang Seng recouped morning losses to rise 0.3% to 19,950.21, while the Shanghai Composite shed 0.3% to 3,073.75.

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