💥 Dow fell 1,100 points for its biggest decline since 2020 as fears over rising inflation rattle Wall Street. It’s the 5th Dow decline of more than 800 points this year. (CNBC)
Markets reverted to heavy selling after consecutive quarterly reports from Target and Walmart stoked investor fears of rising inflation eating into corporate profits and consumer demand.
“The consumer is challenged. We started to see at the end of the year that consumers were turning to credit cards to pay for the rise in food prices, rise in energy prices, and that’s actually gotten much worse,” said Megan Horneman, chief investment officer at Verdence Capital Advisors.
The gold price edged lower as the U.S. dollar strengthened and Treasury yields rose amid the Fed’s aggressive policy stance on rate hikes.
Here’s how the prices of gold, silver, platinum, and palladium have changed over the past week:
Read our SPOTLIGHT to see how interest rate hikes could impact the price of gold.
The EC has lowered its growth forecasts for Europe as the Ukraine war disrupts supply chains and drives up energy commodity prices. The eurozone is expected to grow by only 2.7% this year, down from 4% previously. (European Commission)
After reaching record highs of 7.5% last month, E.U. inflation is expected to average 6.1% this year, three times the ECB's target. This will put a serious strain on European households' budgets.
Russia’s state-owned gas giant Gazprom said it will cut gas shipments to Europe through a major pipeline, sending European gas prices surging. (FT)
On Thursday, contracts linked to TTF, the European wholesale gas price benchmark, climbed 13% to around €106 per megawatt hour, more than quadrupling levels a year ago.
Read our SPOTLIGHT to learn how rising gas prices and inflation fuel each other.
Sri Lanka doesn’t have money to pay even one ship of petrol amid the worst economic tailspin in the country’s history. (Bloomberg)
The island nation fell into default for the first time in its history as the government struggles to halt an economic meltdown that sparked social unrest and political crisis.
Sri Lanka has the fastest inflation in Asia, currently at around 30%, which is predicted to accelerate to 40% in coming months.
India has banned wheat exports, becoming the latest country to do so as the price of grain soared this year triggered by the Russia-Ukraine war. (CNBC)
In addition to Russia and Ukraine, Egypt, Kosovo, Kazakhstan and Serbia have also banned wheat exports.
Given the already tight supply, India's ban could drive global wheat prices to new highs, particularly harming poor consumers in Asia and Africa.
Food prices have reached new highs all over the world, fueling poverty, hunger, and political unrest. Global food crisis stoked by the war in Ukraine could last for years. (Bloomberg Opinion)
“The global consequences of a protracted war could be dire … With the dollar strengthening, many countries will struggle to pay for key imports of food and fuel. Price spikes and shortages could provoke unrest, as they did during the Arab Spring in 2011, while pushing millions into extreme poverty.”
What else is happening
After weeks of desperate resistance, more than 250 Ukrainian fighters surrendered to Russian forces at the Azovstal steelworks in Mariupol, ending the most devastating siege of Russia's war in Ukraine. (Reuters)
The true death toll from the Mariupol siege is still unknown, according to the UN and the Red Cross, but it is certain to be Europe's worst since the 1990s wars in Chechnya and the Balkans.
🇨🇭 The Swiss government proposed allowing its spy agency to breach the country's banking secrecy in order to snoop on financial transactions it believes are used to fund terrorism, espionage, or violent extremism. (Reuters)
"In the event of serious threats to Switzerland's security, the FIS [Federal Intelligence Service] will in future be able to clarify financial flows by requesting information on transactions from financial intermediaries," a government statement said.
A young girl's tooth discovered in a cave in northeastern Laos is shedding new light on the mysterious Denisovans, an extinct human species. (Reuters)
Denisovans, a Neanderthal sister lineage, were previously only known from a few scrappy dental and bone fossils found in Siberia and the Himalayas.
"This is the first time that a Denisovan has been found in a warm region. It means that they were adapted to opposite environments, from cold and high altitude to warm and low altitude regions. In this regard, they were like us, modern humans," said paleoanthropologist Fabrice Demeter of the University of Copenhagen's Lundbeck Foundation GeoGenetics Centre.
See you next week!