Third-quarter corporate earnings, particularly of technology firms, have started to show signs of stresses and strains from a challenging macroeconomic and geopolitical environment. Businesses have been under pressure primarily because of softening demand due to lower discretionary expenditure, high input costs due to inflation, and increased borrowing costs due to rising interest rates.
While the U.S. economy grew at a 2.6% CAGR in the last quarter, the Fed looks all set to match the ECB’s interest rate hike of 75 basis points during its meeting next month to fight the multi-decade high inflation.
