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Stocks head lower, as US GDP heightens expectations of further Fed tightening. Meanwhile, Zelensky’s trip to Washington has coincided with Putin’s pledge to ramp up military spending, leaving little room for optimism of any solution.
Markets crumble as UK and US GDP diverge
“The bears are back in charge today, as UK GDP data provided yet another warning that we may already be in a recession. Notably, we have seen US indices lead to push lower despite an upward revision to the US Q3 growth rate. This likely reflects the growing feeling of concern that the Federal Reserve will continue pushing rates upwards in the absence of any major economic distress signal. For those not in the know, the outperformance of the FTSE 100 would signal relative strength for UK plc. However, despite the FTSE 100 being the only major western index to have avoided significant losses in 2022, the UK has suffered the worst Q3 growth of any G7 nation.”
Putin and Zelensky highlight expectations of a drawn-out conflict
“Today has seen two clear warning signals over the intent to further intensify the military conflict in Ukraine, with Putin planning to expand their military personnel to 1.5 million coming as the US pledges another $1.85 billion worth of military aid that will enable the provision of Patriot missiles. The recent EU decision to implement a price cap on gas imports does signal a weakness that could come back to bite them, where a continued Russia-Ukrainian conflict could drive up prices and stifle efforts to fill EU gas stocks for next winter.”
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