Ripple Effects
Wall Street had a bit of turmoil during Tuesday’s trading session as US Futures, and Asian stocks took a nosedive as investors expressed fears over the military crisis in Easter European as the standoff between Russia and Ukraine continues, and also expressing fears over the American Federal Reserve’s expected monetary policy and its resonating effect on global finance.
On Monday, the North Atlantic Treaty Organization (NATO) had announced that it was going to send standby troops, ships, and jets to reinforce Eastern Europe, a move which Russia has tagged as Western hysteria over its assembling troops and military equipment at the border with Ukraine.
Morgan Stanley Capital International’s widest index of the Asian-Pacific stock market, apart from Japan, dropped 1.2% in value, slipping to its lowest level in several months, while the Japanese Nikkei also lost 2% to glide down to its lowest point since August 2021.
There were other steep declines across stock markets in the Asian-Pacific region. The Hong Kong market shed 1.64%, while South Korea’s KOSPI lost up to 1.67%. The Australian market, on the other hand, had its benchmark fall by 2.73% to enter into an 8-month low point. It was also negatively affected by a much higher inflation print on Tuesday morning, and that created fears of a possible rate increase at a later date.
A Senior Economist at UBP, Casanova Carlos, said that the Asian stock markets were adversely affected by the situations surrounding the US rate increase, continuous tensions over Russian and Ukraine’s row, and high crude oil prices.
Casanova said further that there are positive sides, though. He noted that valuations are rapidly becoming attractive to investors, and earnings are huge for some trading sectors. He thinks, therefore, that there will be a tough contest in the general markets throughout the week.
Stocks that fell in the heated Asian trading hours include the US Futures. Nasdaq futures dropped off 1.2%, while S and P futures dropped 0.95% following the US stock market’s recovery later in the session. It was able to regain losses incurred earlier in the day.
Waiting on The Feds
The Federal Reserve’s 2-day meeting, which begins on Tuesday, has kept traders on their feet while investors continue to postulate on the likelihood of the Federal Reserve announcing a rate increase.
Market investors and traders are likewise eagerly watching out for any clues about the line-up and speed of rate increase throughout the year.