Stock futures signal more selling on Wall Street as stagflation fears mount

Wall Street future are down again Thursday as stark warnings from some of the world’s biggest retailers spotlighted rampant inflation, fueling stagflation fears.

Inflation

Marc Jones for Reuters:

“Target and Walmart coming out with disappointing numbers has really, really spooked people,” said Close Brothers Asset Management’s Chief Investment Officer Robert Alster. “We are going to see a raft of downgrades to U.S. GDP (forecasts) now… it really looks like we are running into a faster slowdown than we expected.”

The S&P 500 had lost 4% on Wednesday while the Nasdaq had fallen almost 5% as interest-rate sensitive megacap stocks Amazon, Nvidia, and Tesla dropped close to 7% and while Apple tumbled 5.6%.

The focus remained on what central banks will now do as they walk the tightrope of trying to regain control of inflation, which is now at 40-year highs… without causing painful recessions.

Reuters:

U.S. stock index futures fell on Thursday, signaling more selling on Wall Street as investors kept a close eye on the impact of rising inflation on the U.S. economy and corporate earnings.

The S&P 500 index and the Dow Jones Industrial Average on Wednesday logged their biggest one-day percentage loss since June 2020 after dismal results from retailer Target Corp underscored just how hard inflation is biting consumers.

Goldman Sachs strategists estimated a 35% probability of the U.S. economy entering a recession in the next two years, while Morgan Stanley’s latest research showed a 25% probability for a recession starting in the next 12 months.

Megacap tech and growth shares such as Apple Inc, Microsoft Corp, Amazon.com, Alphabet Inc and Tesla Inc slipped between 1.1% and 2.4% in premarket trading.

MacDailyNews Take: It was nice of God to allow Jimmy Carter to live long enough to see this.

‘Tis best to get a handle on inflation, if you know how, while you still can.MacDailyNews, May 11, 2021

Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult.MacDailyNews, May 11, 2022

Earlier this year, Interactive Brokers founder Thomas Peterffy said, “Inflation is 7% — 1% or 2% [in interest rate hikes] doesn’t mean anything. If they really wanted to stop inflation, they would have to raise rates to 4%, 5%, 6%.”

Inflation is repudiation. — Calvin Coolidge

When a business or an individual spends more than it makes, it goes bankrupt. When government does it, it sends you the bill. And when government does it for 40 years, the bill comes in two ways: higher taxes and inflation. Make no mistake about it, inflation is a tax and not by accident. — Ronald Reagan

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11 Comments

  1. Stop the misguided crusade against domestic energy production and profligate federal spending and inflation will be stopped dead in its tracks. It’s not difficult…

    …unless you’ve forsaken God by worshiping the false god of gaia and your ideology is centered on growing and feeding Big Government (to say nothing of being an Alzheimer’s puppet installed by the establishment via stuffed drop boxes paid for by oligarch Zuckerberg). Then, it’s difficult.

    TFTFY.

  2. The problem is they’re invested in an ideology and not a reality of how people need and use cheap and plentiful fossil fuels… By attacking our energy sector, which he did do by canceling Keystone XL… it was representative of canceling leases, canceling drilling permits… and nominating people to positions of power who want to quote bankrupt the oil companies and starve them of funding. So, that’s who they are. So, on day one, I said, when you damage our energy economy, which raises our standard of living and also gives us power and prosperity on the world stage, you were handing power and wealth to nations that hate us, that want to wipe the United States off the map. You’re handing power and wealth to Vladimir Putin and to Iran. And I said it a year ago, and that’s exactly what happened.

    Dagen McDowell, March 4, 2022

    1. Hey, the Post cover left off the disastrous, deadly, and wasteful Afghanistan debacle, the return to energy dependence (in 2018, during Donald Trump’s presidency, the United States became a net exporter of oil for the first time in 75 years), the failed attempt to institute a Ministry of Truth, authoritarian-yet-ineffective COVID-19 mandates, the crime surge, and, of all things, inflation!

      1. That and more you’ll find on the centerfold page within the Post.

        However, not the kind of pin-up you’d want to admire!

  3. The thing people seem to be missing here is that all of this is intentional and on purpose. They don’t care about the pain and misery they’re causing even to their so called constituents. It’s about an ideology they believe in and anything outside of that ideology is simply “wrong” or needs to be “eliminated”. They’re in power now so they can do it, but with what they’ve done their future doesn’t look good. All you have to look to in recent history is the Reagan Revolution and how long that all lasted to see that it will be coming again. This is not a messianic prediction either. Real people are really hurting by their ineptitude and policies. That’s all anyone needs to know to determine where the source lies.

  4. Can’t wait for the MAGA Tsunamis of ’22 and ’24 to wash America clean!

  5. Pretty amazing how there’s nearly the same comment vote count on all of comments here and that and that all of the comments had their scores severely hammered. Looks like a commie Dem troll is whacking the comments down to make it appear as if folks don’t agree very much with these comments. Nice try commie Dem troll!

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