Good Data Rekindles Concerns, Equities Fall After 2 Sessions


 The dollar appears to be back in favor after good United States (US) gross domestic product (GDP) data reignited concerns among risk-asset investors about the prospect of aggressive policy tightening.

The final reading of The Uncle Sam's GDP rose 3.2% compared to forecasts and the previous reading of 2.9%, signaling that the US economy is growing well and sparking fears of aggressive interest rate hikes.

As a result, Wall Street ended the 2-day 'Santa Claus' rally to reduce all the gains it made this week.

The Dow Jones Industrial was down 1.05% at 33,027.49, the S&P 500 lost 1.45% at 3,822.39 and the Nasdaq Composite shed 2.18% at 10,476.12.

European shares also reflected the performance of Wall Street with the STOXX 600 index down 0.97% and the MSCI gauge of global shares down 0.98%.

The Asian trading situation this morning saw Japan's Nikkei 225 fall 1% with the core consumer price index (CPI) of the Rising Sun rising 3.7%, the highest level since December 1981.

Australia's S&P/ASX 200 index fell 0.84% and South Korea's Kospi shed 1.24%.

In the meantime, accompanying the GDP data is the unemployment benefit claim statistic which fell from market-setting projections.

This matter indirectly adds to the concern about aggressive rate increases due to the country's economic ability to absorb pressure.

Commenting CFRA Research New York's chief investment strategist, Sam Stovall, the return of interest rate hike concerns by investors also signals the return of a potential recession in 2023.