Markets Close Higher Despite Gloomy Economic Outlook

Most markets closed in the green on Tuesday, despite the Organisation for Economic Co-operation and Development (OECD) forecasting slower economic growth around the globe next year. According to an OECD statement released yesterday, world economic growth is likely to slow to 2.20% next year from 3.10% predicted earlier as “the world economy faces persistently high inflation levels, rising borrowing costs, energy supply shortages, and the ongoing war in Ukraine. Europe and the US are set to be the hardest hit, with GDP growth rates in both areas easing to only 0.50% from 3.30% and 1.80%, respectively.”

A few earnings results from retailers like Best Buy (NYSE: BBY ) and Abercrombie & Fitch (NYSE: ANF ) that topped analysts’ expectations boosted Wall Street yesterday, with all three indices in the green at 18h45. Most investors now await the FOMC minutes from the last US interest rate decision for clues to the central bank’s next interest rate hike.

A rebound in commodity-related shares boosted European markets, with the DAX up by 0.30%, the CAC40 up 0.35%, and the FTSE 100 by 1.01% in the green. Resource and financial counters supported the local bourse which closed 0.42% higher.

While the Hang Seng lost 1.31% due to fears around the impact of further Covid restrictions in China, the Shanghai rose 0.13% and Japan’s Nikkei closed up by 0.61%. “Still, investors remain cautious ahead of US Federal Reserve meeting minutes that could offer clues on the trajectory of US rate hikes, while monitoring the Covid situation in China,” added Trading Economics.

The price of Brent crude rose yesterday, trading at $89.36 a barrel at 18h50 after “Saudi Energy Minister Prince Abdulaziz bin Salman signaled the kingdom is ready to reduce production further to balance supply and demand if needed.” Gold traded slightly higher at $1 741.24 an ounce at the same time.




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