Global stocks on Friday declined as investors looked to avoid “weekend risk”, mainly due to political tension. US, European and Asian stocks fell to a lower price, with only the Dow Jones holding onto gains. The Dow Jones outperformed other indices due to the quarterly earnings release from United Health Group and J.P. Morgan. Both companies saw earnings and revenue higher than Wall Street’s expectations. As a result, both stocks rose in value but are trading lower during this morning’s Asian session.
Investors this week will mainly focus on comments from the Federal Open Market Committee members. Statements, speeches and press conferences will guide the Fed’s intentions for the next two committee meetings and rate decisions. Investors continue to believe another interest rate hike is not likely, regardless of inflation reading higher than expectations. According to many members of the FOMC, higher bond yields have resulted in mortgage rates rising and are tackling inflation without a hike. The US inflation rate read 3.7%, rather than declining to 3.6%. However, economists had previously advised inflation to read a minimum of 3.8% for another interest rate hike to be seriously considered. The main concern for investors was the producer inflation rate, which read 0.5%, notably higher than expectations. This indicates inflation will be removed above the 2% target over the next three months.
