US tech leads the losses as inflation concerns remain

Inflation concerns remain as equities head lower, with UK the housing market coming back in focus says.

US markets lead the losses

“The recent pullback in global stocks has continued apace today, with tech stocks leading the decline thanks to a growing concern that inflation may be difficult to control as wages push higher. Friday’s 0.6% monthly gain for average earnings did little to help sentiment, with traders fearing that the uptick in wages will ultimately lead to price increases for businesses. The fact that we have seen the Nasdaq lead the declines does serve to highlight the growing fears that this downturn in inflation may stutter to the detriment of interest rate expectations.”

UK construction growth under the microscope 

“UK housebuilders are back in focus today, with the construction PMI survey collapsing to a three-month low. While both the manufacturing and service sectors have been in contraction territory of late, it has been construction which has been bucking the trend. However, the incessant rise in interest rates at the Bank of England appear to be taking a toll, with business optimism in the sector falling to a two-and-a-half-year low. Interestingly, the decline in materials seen over recent months has helped drive cost inflation to a 22-month low, with investors shifting their focus on to borrowing costs. The sector looks likely to remain at the forefront of investors’ minds, with tomorrows Halifax House Price index expected to post a fourth decline in five-months.”