Wall St. tanked after dismal economic data



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Wall St. tanked after dismal economic data

On Wednesday, all three key indices of Wall St. had fallen across the board, as a cascade of caustic economic data released earlier in the day had cemented possibilities of an earlier-than-anticipated recession in the US, eventually sending shockwaves across the US money markets while pushing investors on their toes.

In the matter of the fact, in the day’s broad-based decline in key indices of Wall Street was almost entirely galvanized by a deluge of dismal economic data as beforementioned with retail sales plummeting by the most in more than a year.

Earlier in the day, the US Commerce Department had unfurled that US retail sales were slumped by 1.1 per cent with purchases of big-ticket items diving at a breakneck pace, as a higher borrowing cost appeared to have taken a greater-than-anticipated toll on US businesses.

Adding further strains, US Federal Reserve data had revealed that the US manufacturing activity had logged its biggest decline in more than two years, falling as much as 1.3 per cent in December, as fears of a recession grew among investors, repercussion of which had prompted them to jump on to the bandwagon of a mass-scale sell-off frenzy.

Fanning up the worries of a recession further, US Fed officials were quoted as saying earlier in the day that the US Fed needed to raise its benchmark borrowing cost above a 5.0 per cent in order to tame a teetering inflation-surge.

Wall St. totters after dismal economic data

Citing statistics, in the day’s Wall St. closing bell, trade-sensitive Dow dwindled 1.81 per cent to 33,296.96 and Wall Street benchmark S&P 500 was tanked as much as 1.56 per cent, while tech-heavy Nasdaq had been hit with a hefty whiplash of 1.24 per cent to 10,957.01.

Meanwhile, addressing to investors’ caution ahead of a likely less-hawkish Fed at its January 31-February 1 policy meet, a vice president of investment strategy at Genmede, Michael Reynolds said, “t seems that investors are finally coming to the conclusion that getting inflation under control is not a free lunch and that all the tightening the Fed has had to do to get inflation moving in the right direction, comes with economic costs.

Investors may have had this false belief that this soft landing scenario was a higher probability event than it actually is”.

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