Asian stocks are falling on fears of a rate hike
Asian stocks witnessed a decline at the beginning of trading on Thursday, April 20, after investors analyzed the varying profits of companies, coupled with signs indicating the continued strength of the US economy, which increases expectations of interest rate hikes.
Volatility of Asian stocks.
"Many Asian stocks experienced a second consecutive day of decline, as indicators in Australia and South Korea showed a significant drop, while Chinese stocks fluctuated among each other. The CSI 300 and Shanghai Stock Exchange both recorded a decline of -0.43% to reach 4,106.63 and 3,363.04, respectively. Japanese stocks were the luckiest, as some stocks maintained their stability. The Nikkei 225 index recorded a 0.18% increase to reach 28,657.57."
"Several experts traded rumors and leaks about the concern of officials at the Bank of Japan regarding the modification or cancellation of the control program in the upcoming Bank of Japan meeting next week to find solutions to some banking problems in Europe and the United States. On the other hand, China maintained its basic loan interest rates without any changes, after the People's Bank of China fixed the interest rate."
Inflation continues to slow down.
The US markets are in a state of volatility, similar to Asian stocks but less complex. The monthly survey released on Wednesday, April 20th, by the Fed's Beige Book shed light on the state of the US economy. Despite some signs of slowdown, the US economy has not changed much.
Federal Reserve Bank President John Williams said, "The trend of inflation slowing down is continuing, but prices are still high."
Eileen Gibbs, the investment manager at "Main Street Asset Management," said: "Recession doesn't mean companies lose money. Companies with strong free cash flows that don't need to go to banks and get new loans are the ones that tend to perform well."
It is worth noting that the "Bank of America" global index, which includes many stocks, interest rates, currencies, and commodities, reached its lowest level since early 2022.
