August 18, 2023
United States:
Economists Lift US Growth Forecasts, See Fed Higher for Longer
Economists see a stronger US economy into the next year and a smaller rise in unemployment, supporting expectations that the Federal Reserve will keep interest rates higher for longer.
Gross domestic product is expected to advance an annualized 1.8% in the third quarter, nearly quadruple the 0.5% pace projected in July, according to the latest Bloomberg monthly survey of economists. They also see the economy expanding somewhat in the last three months of the year, rather than contracting.
Europe:
European Stocks Drop Anew on Interest Rate, China Worries
European stocks fell on Friday to their lowest level in more than five weeks, as concerns over higher interest rates and a slowing Chinese economy further sapped this year’s rally.
The Stoxx 600 Index was down 1% by 1:09 p.m. in London, extending a drop into a fourth session as miners, retailers and real estate stocks fell, with almost every sector bar utilities in negative territory. Volatility ticked higher, with the the VIX Index hitting its highest level since May.
Asia:
China Steps Up Efforts to Stabilize Markets as Confidence Slumps
Chinese authorities have stepped up efforts in recent days to bolster financial markets in a sign that Beijing is growing uncomfortable with the pace of declines in stocks and the yuan.
Mainland exchanges this week asked some investment funds to avoid net selling equities. Officials requested state-owned banks to escalate intervention to support the yuan, while also encouraging companies listed on the tech-heavy Star Board to buy back shares. The securities regulator said late Friday it will slash handling fees in stock transactions and study extending trading hours for equities and bonds.
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