The Wall Street S&P 500 fell 1.1%, dropping previous gains after a weaker-than-expected consumer confidence survey that sparked concerns about US demand. The technologically heavy Nasdaq Composite fell 1.9 percent – meaning it has lost a quarter of its value this year. The confidence survey published by the Conference Board, a financial intelligence agency, showed that consumers believe that prices will continue to rise even as the Fed tightens monetary policy. Expectations of where US inflation will be in 12 months have reached a record high of 8%. Earlier in the day, Germany’s consumer sentiment, based on economic and income expectations, also fell to a record low. This is “part of the scary stock,” said Jack McIntyre, fixed-income portfolio manager at Brandywine Global. “Many central banks will tighten, including the Fed, in a slowing economy.” Europe’s Stoxx 600 regional index also returned some of its previous gains to trading 0.3% higher. The FTSE 100 strengthened 0.9%. Global shares had received the news earlier in the day that China would reduce quarantine requirements on the mainland for all arrivals from 21 to 10 days. Visitors to the mainland from Hong Kong will only need to be isolated for one week. The Hong Kong Hang Seng Index fell 0.9% after the announcement, while the Chinese CSI 300 Index of Shanghai and Shenzhen Shares listed on the Shanghai Stock Exchange rose 1%. “The bright spot for the world economy is China [reopening]Said Mary Nicola, multi-asset portfolio manager at PineBridge Investments. Tuesday’s moves in the stock market came just before the end of the quarter, a period in which fund managers typically balance their portfolios – a process that can contribute to asset price fluctuations. “The market interprets the weak activity data as an indication that central banks will be less aggressive,” said James Ashley, head of international market strategy at Goldman Sachs Asset Management. “Although the economy is slowing down, it alleviates fears of higher interest rates.” “I’m a little worried that the market is undermining the importance of inflation figures for central banks. . . “Inflation is the predominant concern.” In government debt markets, the yield on the 10-year German bond, a benchmark for eurozone borrowing costs, rose 0.09 percentage points to 1.63%, reflecting a fall in the price of the bond. Speaking at the European Central Bank’s annual forum in Portugal on Tuesday, the bank’s president, Christine Lagarde, said she would act “decisively and consistently” to tackle inflationary pressures. The ECB has said it could go further in September as it moves to reduce inflation, which reached 8.1% in the eurozone in May. The yield on the 10-year US bond bond increased 0.03 percentage points to 3.23%. In commodity markets, Brent crude continued to rise in price after the G7 said it was ready to explore energy cost ceilings to curb Russian revenue. The international oil benchmark index rose 1.6% to $ 116.8 a barrel.
