Weekly recap 6-10 June 2022

USA

Inflation struck again this past week. With many investors expecting a slowdown, they were surprised by the rise in inflation this past May. This led to another sharp drop in the major stock market indices, indicating that possibly, the bear market is not over yet.

There is also another problem, possibly stemming from inflation. Some American retailers are revising their profits in the negative. The main reason is the increase in product stock, caused by lower demand, forcing some to sell many products at a discount.

Europe

European indices are also in negative territory, much due to comments from the ECB. Christine Lagarde suggested an increase in the pace of the benchmark interest rate hike if inflation persists in the coming months.

They will raise the benchmark interest rate by 0.25% in July, right after they end their asset purchase program. He also mentioned that there is a possibility of a larger increase in September if conditions deteriorate.

Asia

Although the Japanese economy contracted in the first quarter, less than expected, its indices saw some gains this week. Part of this boost is thanks to the opening of tourism, and possibly another part to statements of the Japanese government’s continued support for the economy.

The new policies of the Chinese government have been extremely well received by investors. After several years of heavily regulating and controlling the technology sector, it seems to have decided to reduce this scrutiny. Combined with the lifting of some confinement restrictions due to COVID-19 and a more stable situation in the real estate sector, this has led to gains in its stock market.

Visit the Disclaimer for more information.