The global bags are experiencing a drop on this Wednesday, reflecting investor concern about the risk of an escalation in the conflict in Middle East, which, in turn, drives up the prices of the oil and gold.
This anxiety about the geopolitical situation is compounded by the prospect of higher interest rates in the short termafter US economic data shows a rebound in consumer spending in September.
On the previous day, Bond markets take a hit after US retail sales increase more than expected last month, consolidating expectations that economic growth will rebound more than anticipated in the third quarter.
Besides, China reports annual economic growth of 4.9% in the third quarter, beating expectations of 4.4%. Additional data shows increased resistance among consumers, indicating that Beijing’s stimulus measures may be having an effect.
Middle East: pressure on the markets
Tension between investors worsens as Israeli and Palestinian authorities exchange accusations over the explosion that claimed hundreds of lives in a Gaza hospital, further complicating US President Joe Biden’s already tense trip to the region.
These news are contributing to boost oil prices by more than 2%, while safe haven flows send gold up 1.1% to $1,945 per ouncewell above its recent low of $1,809.
The MSCI index of world shares fell 0.2%, the European STOXX 600 falls 0.6% and Wall Street futures fall between 0.4% and 0.5%.
technology stocks, who tend to resent rising interest rates, they face pressure. On Tuesday, shares of Nvidia fall after learning that the United States government plans to stop shipments of advanced artificial intelligence chips to China.
In Europe, Dutch semiconductor maker ASML is one of the hardest hit, down 1.8% after warning of stagnant sales in 2024.
Now, Markets are awaiting results from Netflix and Tesla later in the session.
Meanwhile, public debt is trying to recover part of its losses. The yield on two-year Treasury bonds, which rose 14 basis points the previous day, reaching its highest level in 16 years, fell 2 basis points on the day, standing at 5.193%. The return on ten-year notes fell 3 basis points, reaching 4.818%.
The rise in yields keeps the dollar stable against a basket of currencies.
Source: Ambito
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