World markets mixed after S&P 500 ends worst year since 2008

BANGKOK Shares started the year mixed. European benchmarks opened higher on Monday, following a weak session for the few Asian markets that were not closed for New Year holidays.

This week’s report includes employment data and minutes from last week’s Federal Reserve meeting. 2023 This week begins with uncertainty over the war in Ukraine as well as the possibility that interest rate increases meant to curb inflation could lead to recession.

Germany’s DAX gained 0.5% in early trading to 13,996. 02 and the CAC40 in Paris added 0.7% to 6,520.71. Monday is a New Year’s Day holiday in America and Britain. Markets are closed in the United States and Britain.

In Asia, South Korea’s Kospi fell 0.5% to 2,225. 67 and the Sensex in Mumbai gained 0.4% to 61,109.23. The benchmark for Jakarta was flat.

Over the weekend, a report showed that Chinese manufacturing contracted for a third consecutive month in December, in the biggest drop since February 2020, as the country grapples with a nationwide COVID-19 surge after suddenly easing anti-epidemic measures.

A monthly purchasing managers’ index declined to 47.0 from 48.0 in November, according to data released from the National Bureau of Statistics on Saturday. Numbers below 50 indicate a contraction in activity.

It’s uncertain what impact removing strict COVID-19 policies that crimped production for raw materials and goods and discouraged travel will have on the global economy. The specter of a recession in the U.S., and other major economies, along with a prolonged slump China, are factors that overhang markets.

“We anticipate one third of the global economy to be in recession,” Kristalina Georgiaieva, managing director at the International Monetary Fund, stated in a Sunday interview with CBS’s “Face the Nation” television program.

” “Yes, even countries that aren’t in recession, it would feel as if there were a recession for hundreds and millions of people,” she stated.

Georgieva stated that the U.S. economy is “remarkably resilient” and that measures like the Inflation Reduction Act, and child tax credit, were “good for America. Good for the rest of the world.” “

Investors may be able to get more information from the Fed’s minutes regarding its next steps. The government will also release Wednesday’s November report on job openings. The weekly update on unemployment will follow on Thursday. Friday is the due date for the closely-watched monthly employment reports.

Wall Street also awaits corporate earnings reports, which are expected to begin flowing in mid-January. Investors have been told by companies that inflation could eat away at their profits and revenue in 2023,, even though they raised prices on everything from food and clothing to offset inflation. This has helped to boost their profit margins.

On Friday, U.S. markets logged more losses in quiet trading, closing the book on the worst year for the benchmark S&P 500 since 2008.

The S&P 500 fell 0.3%. It posted a 5.9% loss for the month of December and a 19.4% decline in 2022, or 18.1%, including dividends.

That’s just its third annual decline since the financial crisis 14 years ago and a painful reversal for investors after the S&P 500 notched a gain of nearly 27% in 2021. According to S&P Dow Jones Indices, the index lost $8.2 trillion.

On Friday, the Dow fell 0.2% while the Nasdaq dropped 0.1%. The Russell 2000 lost 0.3%.

Stocks suffered throughout the year due to withdrawal of pandemic stimulus and rising inflation. Central banks raised interest rates in an effort to combat high prices. The Fed’s key lending rates ranged from 0% to 0. 25% at the beginning of 2022 and closed the year at a range of 4. 25% to 4.5% after seven increases. According to the U.S. central banks, it will rise from 5% to 5. 25% by late 2023, with no rate cut before 2024. Russia’s invasion in Ukraine caused inflationary pressure earlier this year. Food commodity and oil prices were more volatile due to existing supply chain problems. Oil closed Friday around $80, about $5 higher than where it started the year. But in between oil jumped above $120, helping energy stocks post the only gain among the 11 sectors in the S&P 500, up 59%.

In currency dealings, the U.S. dollar rose to 130. 94 Japanese yen from 130. 89 yen. The euro fell to $1. 0677 from $1.0699.