Global stocks headed for a third straight day of losses on Tuesday and the dollar held steady as the market assesses how long the Federal Reserve keeps interest rates higher and the likelihood that policy provokes a recession.
US stocks followed European shares lower, with all sectors in the red, with the exception of the defensive utilities sector, which seesawed between gains and losses.
Goldman Sachs’ David Solomon warned about pay and job cuts amid an uncertain outlook, citing “some bumpy times ahead”. Bank of America, meanwhile, is slowing hiring as fewer employees leave in advance of a possible economic contraction, chief Brian Moynihan said. JPMorgan Chase’s Jamie Dimon told CNBC a “mild to hard recession” may hit next year.
The Iseq index of Irish shares again closed marginally lower on Tuesday, ending the session off 0.7 per cent following Monday’s 0.3 per cent decline. Traders in Dublin said volumes have been generally low across Europe this week as a difficult year winds to a close and that the Dublin market was no exception.
Healthcare group Uniphar shed more than 5 per cent on the session to close at €3.26 per share while Cairn Homes was off by close to 4.6 per cent, closing at 87 cent.
Consumer facing stocks are bearing the brunt of the market’s recession anxieties at the moment. Kerry Group, down 2.7 per cent to €86.74 per share, has racked up losses for the past nine days, the food ingredients company’s longest losing streak in 11½ years, traders said.
Moving in the opposite direction, Bank of Ireland gained 2.4 per cent to close at €7.98 per share as investors mull the ECB’s likely next move. AIB was essentially flat on the session at €3.06.
Trading volumes remained soft across Europe as the pan-European Stoxx 600 gave up just under 0.6 per cent while the blue-chip Stoxx 50 index fell 0.4 per cent.
Energy stocks gained on higher European natural gas prices as plummeting temperatures across the region boosts consumption and tests fragile energy systems.
French utility Engie gained 0.4 per cent on relatively high volumes for the session. Europe is still likely to pull through this winter and the next, Engie chairman Jean-Pierre Clamadieu said. “The feeling is that we’ll manage.” Spanish energy company Iberdrola was essentially flat on the session.
The prospect of fresh ECB, Fed and Bank of England rate hikes in the offing continues to be a double-edged sword for bank stocks. Spanish banks BBVA and Santander were off by 0.2-0.7 per cent while Italian lender Intesa Sanpaolo was off by close to 0.6 per cent.
The damage caused to the FTSE 100, down 0.6 per cent at closing bell, by falls in the share prices of the UK’s biggest utility companies was offset by the rises in bank shares as a global sell-off continued.
Lloyds, Barclays, and NatWest – up between 0.1 per cent and 1.6 per cent – all managed to register small but significant rises during the day, but they were not able to stop the FTSE from falling.
The biggest risers on the index were Rolls-Royce, up 2.9p to 93.49p, Phoenix Group, up 15.2p to 611.4p, Barclays, up 2.48p to 158.76p, BAE Systems, up 10p to 826p, and DS Smith, up 3.6p to 308.9p.
The biggest fallers were Mondi, down 73p to 1,468p, Scottish Mortgage Investment Trust, down 24.4p to 755.8p, Endeavour Mining, down 53p to 1,697p, Dechra Pharmaceuticals, down 82p to 2,680p, and Halma, down 58p to 2,160p.
Stocks slumped amid downbeat economic warnings from bank chiefs at a time when concern about the impacts of Federal Reserve policy on growth and corporate earnings is running rampant.
A slide in tech giants like Apple and Tesla weighed heavily on the market, with the S&P 500 falling for a fourth straight session. Meta Platforms tumbled 6 per cent on a report the European Union is targeting the Facebook owner’s advertising model. The dollar saw a back-to-back advance, while oil tumbled.
The S&P 500 fell 1.3 per cent as of 12:37pm in New York while the tech-heavy Nasdaq 100 fell 1.7 per cent. Meanwhile. the Dow Jones Industrial Average was off 1 per cent. – Additional reporting: Bloomberg, PA, Reuters