Still, traders couldn’t resist taking the bait, with Spotify stock jumping 6%, before inflation reality dawned and reversed most of those gains. ‘I believe our future is a lot bigger,’ chief executive Daniel Ek said in a statement on 8 June, speaking at the company’s investor day that flagged bold podcast growth projections. Music streaming platform Spotify Technology (SPOT:NYSE) left investors gobsmacked after predicting that it could be churning out profits on a scale to match Apple (AAPL:NASDAQ) within a decade as it aims for $100 billion revenues. Her flagship ARK Innovation ETF (ARKK:NYSEARCA) lost another 2% over the past week but even tech heavyweights flagged under the strain, led by Amazon’s (AMZN:NASDAQ) 6.5% slump. Data from Bloomberg Intelligence showed her nine ETFs, with a combined $15.3 billion under management, losing 48% since the start of the year. Cathie Wood’s stable of funds has been the biggest casualty among the top 25 issuers. Needless to say, growth got it in the neck again, perhaps best illustrated by ARK’s sinking ETFs. US indices came under intense selling pressure during the past week as recession signals flashed and 10-year Treasury yields rallied back over 3%.
That’s either very loose, or very scary talk. Rampant energy and food price inflation saw US annual inflation rates hit 8.6% in May, the highest rate since 1981, the Labor Department said, after easing in April.Įvercore ISI strategist Julian Emanuel warned that the S&P 500 could fall another 30% if rising energy costs caused further economic contractions.
Investors didn’t have to wait long to see just how right that gloomy prediction was, with US prices rising at their fastest pace in 40 years. In some advanced economies, inflation is now expected to reach levels not seen since the 1970s, the statement warned. The OECD’s lowered forecast, which followed a similar cut by the World Bank over the past week, now projects global growth to decelerate sharply to around 3% this year, and 2.8% in 2023, way down on its 4.5% and 3.2 forecast in December. ‘This slowdown is directly attributable to Russia’s unprovoked and unjustifiable war of aggression, which is causing lower real incomes, lower growth and fewer job opportunities worldwide.’ ‘Countries worldwide are being hit by higher commodity prices, which add to inflationary pressures and curb real incomes and spending, dampening the recovery,’ said OECD Secretary-General Mathias Cormann. If the OECD’s global growth forecast cut wasn’t enough spiking May inflation tipped the balance and Wall Street stocks ended the week coated in red ink, and it’s all down to Russia, blames the organisation. To say US investor sentiment soured over the past week would be something of an understatement.
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