Now it has happened. Investors and investors have gotten cold feet and taken profits off the table. The DAX and Euro Stoxx 50 suffered significant losses yesterday, Wednesday. The momentum in the market was no longer sufficient to convince fresh capital to continue investing in the corresponding stocks. In addition, there was probably profit-taking, which led to a significant oversupply of company shares leading to falling share prices. In contrast to the DAX and Euro Stoxx, the British FTSE 100 was able to maintain a high level, even though inflation in the UK has risen more than the market had expected.
Are US requirements accelerating the correction?
It now remains to be seen how the situation on the markets will develop further and whether the profit-taking of market participants will expand or whether yesterday's setback was a short-term reaction and share values will again be in demand at more favourable prices. The report on the development of unemployment claims in the USA, which will be published at 2:30 p.m. Central European Time, could contribute to movement in the markets this afternoon. It should also be noted that tomorrow, Friday, the purchasing managers' indices will be published, which can also provide an indication of whether the current rally can take off again.
Federal Reserve communicates inflation concerns
Investors and investors can also look forward to the guidance from the USA in the coming days, as Fed members will not tire of emphasizing that they are seriously concerned about inflation. They list risks related to global supply chains, which can have a negative impact on price developments due to the newly formed foreign trade policy. The problem for the Fed is that supply chain problems cannot be corrected with monetary policy instruments, i.e. the Fed's instruments would have no effect.
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