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The financial markets in the US and Europe have had their worst quarter since the COIVID-19 outbreak

The financial markets in the US and Europe have had their worst quarter since the COIVID-19 outbreak

Global stock markets fell on Thursday, with the S&P 500 falling more than 1.5 percent as investors worried about a recession and the Russian-Ukrainian conflict, while oil prices fell more than $6 as Washington began releasing a record amount of emergency oil stockpiles. The losses pushed US and European equities to their worst quarterly loss since the beginning of 2020, when the COVID-19 epidemic threw the global economy into a spiral.

Quarter-end portfolio rebalancing supported bond demand while keeping rates low, while a highly monitored portion of the U.S. Treasury yield curve lingered near inversion after temporarily inverting on Tuesday. Many people believe that an inverted yield curve, in which short-term Treasuries yield more than longer-term debt, signals the start of a recession.

“An inverted Treasury yield curve is one indicator that future US equities returns would be disappointing,” said Nicholas Colas, Co-founder of DataTrek Research “Can we avoid poor or negative returns in 2022 if 10-year Treasury rates fall below two years? Perhaps, but only if geopolitical threats and their impact on oil prices persist or worsen.” The S&P 500 fell 1.6 percent as a result of a late-day sell-off. The Dow Jones Industrial Average fell 1.6 percent, while the Nasdaq Composite fell 1.5 percent. The STOXX 600 in Europe had down 0.94 percent.

Thursday’s stock market pessimism underscored how difficult March has been for stocks. Even after a recent surge as investors hailed indications of progress in Russia-Ukraine peace negotiations, the S&P 500 is still down 5% in the first three months, its worst quarterly performance in two years. Europe’s STOXX 600 performed worse, down 6.5 percent in the first quarter, its worst quarterly decline since the beginning of 2020. The MSCI World Equity index fell 1.3 percent on Thursday and suffered its worst quarter in two years, falling 5.7 percent. “Risk assets remain fragile,” according to experts at Australia’s ANZ Bank. “As the U.S. earnings season begins around April 11th, many experts anticipate a surge of earnings downgrade.”