In short:
Global financial markets have fallen on fears the US is heading toward a recession.
The tech-heavy NASDAQ lost 2.43 per cent on on Friday, local time, and is now in technical correction.
What’s next?
Analysts say further economic and financial markets weakness could put pressure on central banks to ease monetary policy.
There are genuine concerns the world’s largest economy is heading toward a recession, and the fear is gripping global financial markets.
Thursday night’s official US jobless claims figures showed a surprising number of Americans out of work.
Separate figures showing a weak manufacturing sector added to worries about the US economy.
The news sent global financial markets into a tailspin Friday, on fears the US economy was on track for what is known as a hard landing.
“A [sharemarket] correction is underway,” AMP’s head of investment strategy Shane Oliver said.
It followed weeks and months of an incredible run-up in stock prices in the US and in Australia.
“Shares went sky high into July on the back of better news on inflation, increasing optimism about lower interest rates ahead and optimism about IT and AI-related earnings,” Mr Oliver, who manages $3 billion in investments, said.
The US Federal Reserve announced late this week it was leaving official interest rates unchanged at between 5.25 per cent and 5.5 per cent.
At the time it was seen as “good news”, given chairman Jerome Powell’s qualified commitment to lowering interest rates in September.
However,…
