Trader working on the New York Stock Exchange floor (NYSE) in New York City, U.S.A, March 9, 2020. REUTERS/Bryan R Smith Bryan R Smith/Reuters
Stocks in the United States closed lower Monday due to fears about rising oil prices and slower economic growth.
Stagflation is characterized by slower growth and rising prices. This has historically resulted in poor stock returns.
According to Goldman Sachs, the median quarterly return for S&P 500 since 1960 was 2.1%. This is despite periods of high inflation and low GDP growth.
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US stocks closed lower Monday morning, wiping out early morning gains due to investors struggling with rising inflationary pressures as well as the prospect of slower economic growth.
Oil prices rose to an all-time high of $80 per barrel, a result of an ongoing supply shortage overseas.
Goldman Sachs has cut its US GDP forecast for the 3rd month in succession due to the ongoing economic drag caused by the COVID-19 Delta variant and the global semiconductor crunch.
Stagflation is caused by rising prices and slower economic growth. According to Goldman, historically, the median quarterly S&P 500 return has been -2.1%.
Here are the US indexes at 4:00 p.m. ET closes Monday
Bitmain, a crypto mining company, said that it will no longer ship its equipment to China after the crackdown by the government on cryptocurrency mining.
Vitalik Buterin, co-founder of Ether, said that it was shame on "bikini maximalists", who support El Salvador's president by forcing businesses to accept cryptocurrency.
Jamie Dimon, CEO of JPMorgan, called bitcoin "worthless" during a conference Monday. He also questioned the 21 million supply.
SoFi surged up to 14% after Morgan Stanley gave the fintech company an "overweight" rating. They predicted that the stock could surge 54% by Friday's close.
Wedbush reiterated its bullish views on cybersecurity provider Palo Alto Networks. It argued that the stock could increase 22% from current levels due to increased government cyber security spending.
Bank of America stated that Starbucks is on track to grow 21% because of its loyalty rewards program, which drives growth and protects Starbucks from competition.
West Texas Intermediate crude oil increased as high as 1.85% to $80.82 a barrel. Brent crude oil, the international benchmark for oil, rose 1.61% to $83.72 per barrel.
Gold dropped as high as 0.14% to $1,754.90 an ounce.