The global economy continued to give mixed signals as it battled with the fallout from Russia’s invasion of Ukraine and lingering high inflation.
US stocks slipped Monday just as shares dropped in China, Hong Kong and South Korea. The S&P 500, NASDAQ 100 and European contracts all retreated.
Crude oil climbed for a third day, and investors eyed diplomatic efforts to end Russia’s invasion of Ukraine. West Texas Intermediate oil marched past $108 a barrel as oil prices remained elevated. Key commodities, such as oil and wheat, are contributing to climbing consumer prices and are making inflation even more difficult to bring down.
The bond market continues to flash caution about risks from the war and rising US interest rates. The Treasury yield curve is flattening as investors question whether safe havens are the way to go.
What does this mean for me?
Several key themes remain in the thoughts of investors. Inflation has been an ongoing problem for the last year, and just when central banks were getting themselves into gear to tackle it, the Russia problem arose. Now, inflation is even harder to chip away, oil prices are rising, there are whispers of a food shortage, and consumer prices are set to remain stubbornly high. For this reason, many analysts are predicting a major economic slowdown.
For diversified investors, now is the time to assess portfolios and manage the risk of exposure to a generalized economic downturn, which appears inevitable.
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