Stock rally stalls amid Russia, inflation risks
BNN Bloomberg
Stocks retreated as traders struggled to evaluate the risk of geopolitical tension in Ukraine and the impact of mounting inflation pressures on central bank policy.
Stocks retreated as traders struggled to evaluate the risk of geopolitical tension in Ukraine and the impact of mounting inflation pressures on central bank policy.
The equity market resumed its losses on Wednesday, with technology companies dragging down the S&P 500. The standoff between Russia and the West over Ukraine is continuing to vex markets as investors struggle to assess Moscow’s claim that some forces are being withdrawn. European leaders will hold an emergency summit on Ukraine on Thursday, to be followed by a meeting of foreign ministers from the Group of Seven nations in Munich on Saturday.
“We’re not out of the woods and there’s still risk,” Adrian Zuercher, head of global asset allocation at UBS Group AG’s wealth management arm, said on Bloomberg Television.
Investors gauging the likely size of the Federal Reserve’s rate hike in March and plans for shrinking a balance sheet will get fresh clues when the central bank publishes minutes of last month’s policy meeting at 2 p.m. in Washington. U.S. retail sales rebounded by more than forecast with the biggest gain since March, illustrating resilient demand despite soaring inflation.
A rotation out of American equity markets in favor of global peers may be only just getting started, Citigroup Inc. strategists said, joining a chorus of cautious calls about Wall Street’s prospects. U.S. equity funds attracted about US$400 billion inflows in 2021, about as much as international funds, according to Bank of America Corp. and EPFR Global data. The trend is starting to shift, according to Citigroup, with flows into equity funds that exclude the U.S. outpacing U.S.-inclusive funds for seven out of the last eight months as a share of assets under management.
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