The risks to the global economy are leading to an increasingly gloomy view of the months ahead for corporate leaders, government officials and other VIPs gathered at the World Economic Forum meeting in Davos, Switzerland. The issues range from soaring inflation, Russia’s war in Ukraine, squeezed supply chains, the threat of food insecurity around the world and the lingering COVID-19 pandemic. The head of the International Monetary Fund sought to dispel the gloom this week, saying a global recession isn’t in the cards but “it doesn’t mean it’s out of the question.” But Kristalina Georgieva acknowledged that it’s going to be a “tough year,” with one of the big problems surging food prices.
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Asian stock markets are mixed after Wall Street sank on weak U.S. housing sales and a profit warning by a prominent social media brand. Shanghai and Seoul advanced while Tokyo and Hong Kong declined. Oil prices rose more than $1 per barrel to stay above $110. Wall Street’s benchmark S&P 500 index lost 0.8% after the profit warning Tuesday by Snapchat’s parent company spooked investors into dumping social media stocks. Construction stocks fell after U.S. home sales plunged in April. Investors are on edge about the impact of interest rate hikes in the United States and other Western economies to cool surging inflation, as well as Russia’s war on Ukraine and a Chinese economic slowdown.
Best Buy Co. has posted first-quarter results that showed shoppers pulled back on their spending and higher costs ate into profits. The nation’s largest consumer electronics chain also cut its outlook for the year, citing a deteriorating economic environment. Best Buy was among a handful of big winners in the pandemic, as shoppers flocked to its stores and website to buy equipment to furnish home offices or cater to their children's needs for virtual learning. But like many retailers, Best Buy is struggling with rising costs for everything from labor to shipping as supply chain backups hit companies worldwide. The electronics chain also has had to navigate global chip shortages and soaring fuel costs.
Federal Reserve Chair Jerome Powell, fresh off winning Senate confirmation for a second four-year term, for the first time Thursday acknowledged that high inflation and economic weakness overseas could thwart his efforts to avoid a recession. Previously, Powell has sought to portray the Fed’s efforts to tighten interest rates as consistent with a so-called “soft landing” for the economy. In that scenario, the Fed would tighten borrowing costs enough to cool the economy and bring down inflation, without going so far as to tip the economy into recession. But on Thursday he acknowledged such a soft landing may be out of the Fed's control.
Asian shares are mostly lower as worries over inflation temper optimism over President Joe Biden’s remark that he was considering reducing U.S. tariffs on Chinese imports. Benchmarks fell in Tokyo, Seoul, Shanghai and Hong Kong but rose slightly in Sydney. Oil prices and U.S. futures were lower. Biden announced a new economic and trade initiative with the region Monday while on a visit to Japan. He also confirmed to reporters that he planned to discuss the issue of punitive tariffs imposed on China during former President Donald Trump’s administration with Treasury Secretary Janet Yellen once he returns to Washington. The comments raised optimism over a possible easing of tensions between the world’s two biggest economies.
DAVOS, Switzerland (AP) — Two high-level speakers at the World Economic Forum gathering say Afghanistan’s most urgent need is saving its econo…
President Joe Biden has launched a new trade deal with 12 Indo-Pacific nations aimed at strengthening their economies as he warns Americans worried about high inflation that it is “going to be a haul” before they feel relief. The president says he does not believe an economic recession is inevitable in the U.S. Biden spoke at a news conference in Toyko after holding talks with Japan’s Prime Minister Fumio Kishida. He acknowledged the U.S. economy has “problems” but said they were “less consequential than the rest of the world has.” He added: “This is going to be a haul. This is going to take some time."
Shares are mixed in Asia in cautious trading after Wall Street rumbled to the edge of a bear market on Friday. Investors were awaiting minutes from the last policy setting meeting of the Federal Reserve. Tokyo and Sydney were higher while Hong Kong and Shanghai declined. On Friday the S&P 500 dipped more than 20% below its peak set early this year before buying late in the day gave it a tiny gain. It finished 18.7% below its record. That capped a seventh straight losing week, the longest since 2001. Rising interest rates, high inflation, the war in Ukraine, and a slowdown in China’s economy are all punishing stocks and raising fears about a possible U.S. recession.
The much-ballyhooed World Economic Forum in the Swiss Alpine town of Davos gets underway this week after a two-year hiatus due to the COVID-19 pandemic. There's no shortage of issues to keep elite policymakers, business gurus and activists busy as forum organizers hope those groups try to work toward improving the state of the world. Ukraine's war, climate change and the yawning gaps between rich and poor are some of the themes to be tackled in roughly 270 panel discussions. Ukrainian President Volodymyr Zelenskyy will be participating by video, while other world leaders and notables like U.S. climate envoy John Kerry are set to take part.
With prices across the economy soaring at their fastest pace in decades, you might think Americans would tap the brakes on spending. Not so far. Consumers as a whole are showing surprising resilience, not only sustaining their spending but increasing it even after adjusting for inflation. That spending is helping allay concerns that a recession might be near. Yet there are signs that some people, especially in lower-income households, are starting to cut back. How long consumers as a whole continue to spend at healthy levels despite the pressures from inflation will be key to whether the U.S. can avoid a recession as the Federal Reserve raises borrowing rates.