THE NEW YORK TIMES: Pessimism is deepening as bellwether companies like FedEx and General Electric warn of worsening economic and business conditions.
After one of the worst weeks for the stock market this year, investors are losing their nerve as the burst of optimism that accompanied a summer rally fades away.
The S&P 500 index was set to close out the week around 5 percent lower than where it started, down 1 percent in early trading on Friday as corporate executives from bellwethers like FedEx and General Electric warned of crimped supply chains and declining economic activity that would hurt corporate profits.
The stock market’s move on Friday added to sharp losses earlier in the week, after a widely watched gauge of inflation showed that consumer prices rose more than expected in August. The fresh data undermined the popular thesis that inflation had peaked, ushering in expectations that the Federal Reserve would have to do more to restrain the economy that previously expected, raising the risk of the United States slipping into a severe downturn.
The stock slide marked the latest bout of whiplash for investors after a string of surprises this summer that have consistently undermined a more optimistic consensus in financial markets. Now, some of the most powerful trading houses in the world, responsible for investing trillions of dollars on behalf of pension funds, governments and other investors, are warning that there is more pain to come. » | Joe Rennison | Friday, September 16, 2022
