Expectations for the continued deterioration of the global economy .. the bleeding of stocks will continue!

Global equity markets are expected to continue to bleed as the sell-off continues quest’summer, as central banks around the world raise interest rates to try to fight the spiral of inflation.

For his part, chief executive officer and head of research at financial advisory firm Rosa & Roubini, Brunello Rosa, believes central banks will continue to tighten monetary policy as markets continue a downward spiral, according to CNBC and Al Arabiya. .net.

“Now is the time to reassess economic fundamentals in Worldwide in terms of growth. It is difficult for markets to be fully optimistic when inflation rises, growth falls and interest rates rise rapidly in all over the world, “he said. he said.

On Thursday, the Dow Jones Industrial Average fell more than 1,000 points while the Nasdaq Composite fell nearly 5%. This 5% drop wiped out all gains from a short-term rally the day before when the US Federal Reserve announced it would raise interest rates.

This occurred when the short-term hike was driven by investor optimism that the Federal Reserve had not implemented a larger hike in interest rates, but this optimism quickly gave way to fears of rising interest rates. interest rates later in the coming months.

Rosa noted that investors were initially optimistic about the news of a 75bp rate hike, but the fact that there is still a strong possibility of several 50bp hikes in the coming months has raised investor concerns.

“Obviously all the central banks are talking in assertive at this point, but the truth is that excessive tightening will eventually lead to an economic downturn, ”Rosa said.

He also noted that most governments in Europe and the United States constantly talk naively about the possibility of avoiding an economic recession.

“In the eurozone and the US, they haven’t come close to the realization that there is going to be some sort of contraction in economic activity,” he said.

Rosa predicts that the Russian invasion of Ukraine will last much longer than many investors expect, which will continue to fuel ongoing supply chain disruptions and inflation, adding fuel to the fire of higher interest rates.

In turn, the Stoxx 600, the broadest index of European equities, fell 1% on Friday morning after Thursday’s heavy Wall Street sell-off. The Stoxx 600 has dropped more than 11% so far quest’year.

In Asia, Hong Kong’s Hang Seng Index fell 3.81% e in China Shanghai Composite Index fell 2.16%.

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