As trading closes for the New Year, the global stock markets have shown a mixed trend.
On the flip side, Federal policymakers have discussed key issues such as economic instability, diminishing reserves, inflation, and high yields.
Russia and Ukraine war has also remained a hot topic during the feds meetings.
Asian Markets Showed the Mix Trend
South Korean Stock Index Kospi slipped by 0.1%. And Indian Sensex decline has risen by 0.1% as businesses close for the New Year. Moreover, Jakarta’s benchmark saw a bit plunge in its overall index.
Talk of Europe Germany’s DAX index was lower by 0.5%. The U.S. stock markets were closed because of the holidays.
China’s Covid-19 Lockdown Issues Continue to Hunt the Economic Activities Down
The past seven days’ data shows that Chinese economic activities, especially the manufacturing industry hit a low for the third straight month.
The primary issue is rising Covid-19 matters as the country tries to eliminate the Covid-19 problems. Recently the ruling authorities of China decided to lift the lockdown. As a result, Covid-19 cases reached a record high.
If the government decides to impose a lockdown, it will affect the production of raw materials and other goods.
As a result, the global economy might face issues where meeting the industrial demand might become impossible.
The Fed has decided to share the meeting minutes so that investors can clearly understand the future economic landscape.
Wall Street is also looking forward to the financial indicators about the earnings of some of the biggest corporate organizations.
Companies are also releasing statements that investors should keep inflation and other economic factors in focus before investing in the market.
Chances are high that most companies might see a decline in their overall revenues in 2023, and they might have to raise the prices to survive the difficult period.
The US Stock Markets Also Suffered Losses
The U.S. markets logged off trading and assumed the holiday for welcome 2023. However, in the end, the S&P 500 index was amongst the biggest loser as the index suffered a record slump since 2008.
2022 has been the worst-performing year for S&P 500. The 24 hours trade volume of the index declined by 0.3%, and for December 2022, it fell by 5.9%. However, for the year 2022, it suffered a slump of 19.4%.
It is also important to know that in 2021 the index gained 27%. S&P 500 losses account for nearly $8.2 trillion in value.
Apart from S&P 500, the Dow Jones and NASDAQ index declined by 0.2% and 0.1%, respectively.
A Broder Picture Shows That Stocks Have Struggled Throughout 2022 and Are Most Likely to Struggle Again
A pandemic fears mount, high inflation, interest hikes, and global financial crisis all have played their role in making the stock market vulnerable.
The further slump in prices came due to the Russia and Ukraine war. This has resulted in a global energy crisis. That is why the stocks of the entire energy sector have suffered a lethal blow. This year energy sectors were among the worst-performing sectors.
This does not end here. Some of the biggest IT companies also suffered massive losses as their prices touched gigantic lows.
As far as 2023 is concerned, the U.S. central bank has hinted that it might raise the interest rate by 5.23 by the end of 2023.
As interest rates rise, it will prevent investors from selling the high-price shares of tech giants such as Apple, Google, and Microsoft. As a result, the selling pressure will ease off from these shares.
Despite the current circumstances, the USD remained stable compared to other currencies, which is why the U.S. economy quickly recovered. Germany, British, and Chinese economies are still struggling compared to the U.S. economy.
If China’s Covid-19 recovery is delayed, the energy sector is in great danger of having another troublesome year.