Macquarie shares bear the brunt of bank sell-off amid inflation bomb

August inflation data in the United States turned out to be catastrophic for markets, including the Macquarie Group Ltd (ASX: MQG) share price today.

As we head into the afternoon, shares in the investment bank are feeling the pinch. Initially, Macquarie shares opened at $176.57 apiece. However, the fear of sticky inflation has suffocated the $70 billion bank share — now trading 3.6% lower to $175.55.

Let’s take a closer look at the landscape today.

What is draining the Macquarie share price?

The market is suffering a widespread sell-off on Wednesday, with estimates of around $65 billion in market capitalisation erased. This follows a shocker of a session on US markets last night, which saw more than US$500 billion of value evaporate.

It appears the Macquarie share price is following in tow today. The current decline in the investment bank’s share price makes it the worst of all the bank shares in the S&P/ASX 200 Index (ASX: XJO). For context, the performance of its peers includes:

• Commonwealth Bank of Australia (ASX: CBA) down 3.4%
• National Bank of Australia Ltd (ASX: NAB) down 3.56%
• Westpac Banking Corp (ASX: WBC) down 2.4%
• Australia and New Zealand Banking Group Ltd (ASX: ANZ) down 2.5%

The considerable falls are likely spurred on by the higher-than-expected consumer price index (CPI) data from last night. The US recorded inflation of 8.3% compared to a year ago, versus an expected 8.1% reading.

It is hard to say exactly why the Macquarie share price is feeling the most pain today. Possibly, the bank’s heightened exposure to investment-related income. Whereas, the other major banks are more focused on the mortgage lending market.

Finally, the Macquarie share price is now in the red over the past 12 months. Yet, Morgans recently gave the investment bank an add rating and a $215 price target.

The post Macquarie shares bear the brunt of bank sell-off amid inflation bomb appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has positions in Commonwealth Bank of Australia and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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