The US stock indices were traded yesterday without any unified dynamics. At the close of the stock exchange yesterday, the Dow Jones Index (US30) rose by 0.20%, and the S&P 500 Index (US500) fell by 0.27%. The NASDAQ Technology Index (US100) closed yesterday negative by 0.43%.
The US service sector continues to perform relatively strongly, but manufacturing is struggling, as evidenced by the ninth consecutive decline of the ISM index. At the same time, residential construction is picking up due to a shortage of homes for sale, and non-residential starts are struggling due to tighter credit conditions. The July ISM manufacturing index rose to 46.4 from 46.0 (consensus 46.9), but given that it is below the 50 level, this still indicates a contraction in the sector, and this is the ninth consecutive month of contraction. The New Orders Index rose to 47.3 from 45.6 (a contraction, but slower than in June), and the Manufacturing Index ISM jumped to 48.3 from 46.7. Despite the rising reading, all components related to manufacturing activity remain in contraction territory.
The US labor market has begun to show the first signs of cooling. According to the JOLTS report, job openings fell to 9.582 million in June from a downward revised May figure of 9.616 million. The consensus had expected a result of 9.6 million. Also weak was the employment figure, which fell to 44.4 from 48.1, the lowest level in three years. Only 17% of industries reported an increase in hiring, down from 33% in June. Such data suggests Friday's Nonfarm Payrolls report will be weak.
Pfizer Inc (PFE) reported mixed quarterly results. Profit exceeded forecasts, but revenue fell short of expectations. The company also lowered its full-year earnings outlook, warning of near-term revenue challenges. Merck & Company Inc (MRK), meanwhile, reported a narrower loss as second-quarter revenue exceeded analysts' forecasts, helped by higher sales of cancer drug Keytruda. Uber Technologies Inc (UBER) shares rose more than 2% after its third-quarter outlook was better than the second-quarter results but missed analysts' forecasts on both the top and bottom lines.
Equity markets in Europe fell yesterday. Germany's DAX (DE40) decreased by 0.85%, France's CAC 40 (FR40) fell by 0.85%, Spain's IBEX 35 (ES35) lost 0.89%, and the UK's FTSE 100 (UK100) closed negative by 0.43%.
Oil prices rose in Asian trading on Wednesday, remaining at more than three-month highs, as industry data pointed to a much larger-than-expected decline in US inventories over the past week.
Asian markets were mostly up yesterday. Japan's Nikkei 225 (JP225) increased by 0.92% yesterday, China's FTSE China A50 (CHA50) was up by 0.38%, Hong Kong's Hang Seng (HK50) decreased by 0.34% on Tuesday, and Australia's S&P/ASX 200 (AU200) was positive by 0.54%. Most Asian stocks started to fall at the open on Wednesday, with technology stocks facing profit-taking after Fitch unexpectedly downgraded the US sovereign rating.
The Bank of Japan's decision last week to change its policy of controlling bond yields was aimed at making the massive stimulus more sustainable, not a retreat from ultra-low interest rates, BOJ Deputy Governor Shinichi Uchida said Wednesday. Uchida also said there is still a long way to go before conditions are ripe for raising the short-term interest rate from the current level of minus 0.1%.
New Zealand's unemployment rate rose in the second quarter, and wage inflation showed signs of slowing, suggesting that the labor market is starting to weaken after continuous rate hikes by the Central Bank. The unemployment rate rose to 3.6% from 3.4%. Economists expect further deterioration in New Zealand's labor market conditions.
S&P 500 (F)(US500) 4,576.72 −12.24 (-0.27%)
Dow Jones (US30) 35,630.55 +71.02 (+0.20%)
DAX (DE40) 16,307.64 −139.19 (-0.85%)
FTSE 100 (UK100) 7,666.27 33.14 (-0.43%)
USD Index 102.23 +0.37 (+0.36%)
- – New Zealand Unemployment Rate (q/q) at 01:45 (GMT+3);
- – Japan Monetary Policy Meeting Minutes at 02:50 (GMT+3);
- – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
- – US Crude Oil Reserves (w/w) at 17:30 (GMT+3).
by , 2023.08.02
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