The stock market has experienced two rough weeks, ending recently with a warning from FedEX about an imminent slump in the global economy that sent shares to the red territory.
FedEx is but one business among millions of companies across the world, especially in the advanced countries. Transportation stocks are giving a leading indicator on daily basis for the economy. Investors do not tend to digest the daily news on a company-by-company basis, rather they prefer to look at the economy as a whole.
Are markets heading to a global recession? The answer could be ‘YES’. It could be extremely difficult for central banks to raise interest rates sufficiently to curb inflation without the risk of slowing economic growth to a level that results in a global recession.
The tight labour market and continued energy and food supply chain disruptions will only worsen the issue.
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