THIS IS AN INFORMATION UPDATE. The previous AP story follows. TOKYO (AP) – Global stocks fell on Tuesday in the wake of Wall Street falling into a falling market as investors anxiously thought of a new and uncertain world with higher interest rates, international conflicts and fears of recession. Shares fell in Europe, marking short-term gains after the opening of the markets, while Asian stocks fell but later recovered some gains. The STOXX Europe 600 Index fell 0.5% after opening at higher levels. The French CAC 40 fell 1.33%, the DAX fell 0.55% and the FTSE fell 0.4%. In Asia, Shanghai advanced, while Hong Kong finished firmly and Tokyo retreated. Tuesday’s rally followed Monday’s rally on Wall Street, where the S&P 500 lost 3.9%, dropping 21.8% below its all-time high. This meant a bear market, when an index has fallen 20% or more from a recent high for an extended period of time. At the heart of the sell-off is the US Federal Reserve’s attempt to control inflation by raising interest rates. The Fed is trying to bring prices under control and its main method is to raise interest rates, but this is a blunt tool that could slow the economy too much and cause a recession. The war in Ukraine has driven oil and food prices soaring, fueling inflation and reducing consumer spending, especially in Europe. “The old pre-coronary equilibrium with low inflation, extremely loose monetary policy and low geopolitical risk premiums is no longer valid,” said Andreas Koester, Union Investment’s portfolio manager in Frankfurt, Germany. “We are now in a transition to a new, post-coronary equilibrium, only the outlines of which are visible, such as higher levels of inflation or a return to the competition of great powers on the international stage,” Koester added. Sudden falls, however, can offer venture capitalists the opportunity to seize opportunities. US stocks seemed to be heading for a modest recovery as markets opened, with the Dow Industrial Futures up 0.05%. The future for the S&P 500 was 0.1% higher. Some economists speculate that the Fed may raise its key interest rate by three-quarters of a percentage point during its meeting on Wednesday. This is three times the usual amount and something the Fed has not done since 1994. “Global markets. Other central banks around the world, including the Bank of England, have also raised interest rates, with the European Central Bank saying it will do so next month and in September. In addition to inflation concerns and what central banks are doing to curb rising prices, restrictions to curb COVID-19 spread to China have also weighed on the market climate in Asia. The shift of central banks, especially the Fed, to higher interest rates has reversed the spectacular rise in stock prices caused by the massive support of the markets after the pandemic hit in early 2020. Markets are preparing for higher-than-usual increases. at the top of some discouraging signs for the economy and corporate profits, including a historically low preliminary estimate of the consumer climate exacerbated by high gasoline prices. Higher benchmark interest rates increase yields on less speculative investments, such as bonds, increasing their attractiveness relative to equities. And design moves will slow down the economy, making borrowing more expensive. The risk is that central banks could cause a recession if they raise interest rates too high or too fast. Last month, the Fed signaled additional interest rate hikes twice the usual amount likely in the coming months. US consumer prices are at their highest level in four decades, up 8.6% in May from a year earlier. One of the most reliable warning signs of an economic downturn sounds as US short-term bonds briefly outperformed longer-term ones. This can be a sign of pessimism about the long-term outlook and signal a recession that may be on the way. Another factor influencing inflation and the investment climate is the price of oil. It remained close to $ 120 a barrel on Tuesday, about 60% so far this year. US crude oil futures recovered from losses earlier on Tuesday, hitting 54 cents at $ 121.47 a barrel in electronic trading on the New York Mercantile Exchange. It gained 26 cents to $ 120.93 on Monday. Brent crude, the international standard, gained 62 cents at $ 122.89 a barrel. In foreign exchange, the dollar fell to 134.29 Japanese yen, from 134.46 yen late Monday. The euro cost $ 1.0446, up from $ 1.0409.
