Global stocks fell, with signs of higher interest rates in the US and Europe.

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As investors digested the change in the Federal Reserve (Federal Reserve Bank of the United States) and the European Central Bank (ECB), the planet’s major stock markets plunged this Monday (25).

In the United States, Jerome Powell, Chairman OotyHe said a 0.5 per cent rise in interest rates at the next monetary policy meeting last Thursday (21) was “on the table”.

Powell’s speech reveals that US central bank leaders tend to take a tough stance in the fight against inflation, which can raise interest rates, which are considered neutral – allowing economic growth without increasing inflation.

Also, the leader ECBChristine LagardeLast Friday (22) he said that there is still a “strong risk” of rising interest rates in the euro zone in 2022. LagardeBonus Purchase Plan ECB Should end at the beginning of the third quarter, which will lead to the beginning of a cycle of higher interest rates in the block.

In the face of rising interest rates in the US and Europe, investors are taking a more cautious stance, fleeing risky assets such as stocks and more defensive assets such as fixed income options.

Finally, Asian stock markets closed with a strong fall, still polluted by the Chinese crisis.

The Asian corporate economy is showing signs of slowing down recently, especially after the Chinese real estate crisis was exposed by the collapse of the developer. Always tremendous.

In addition, China is facing a new eruption of Govt-19, which has forced the government to announce a new one. Locks In many regions of the country, it further reduces local economic activity.

In the face of this news, falling oil and iron ore prices in the international market are creating a negative outlook for companies such as Petropras (PETR4) And the valley (VALE3)

Shanghai code CollaborationThe main stock index of the Shanghai Stock Exchange fell 5.13% to close at 2,928.51 points on Monday.

Read on ‘Market Exploration’ (Exclusively for UOL Investmentos subscribers): Information about selling Oi’s mobile assets to competitors TIM, Claro and Vivo.

A hug,

Raphael Bevilacqua
Chief Strategist And Institutional Partner Of Levant

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