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Global markets remain tense amid US economic concerns

Investors remain cautious. There was little movement on Wall Street yesterday as US stock markets stabilised somewhat. Markets in Europe and Asia remained under pressure. The ISM services purchasing managers index is expected to provide further clues today before all eyes turn to Friday's employment report.

Date
Auteur
Dominique Stutz, LGT
Temps de lecture
5 minutes

Market
© Shutterstock

In New York, after a difficult start to the month, the stock indices have calmed down somewhat. There was little movement and the benchmark Dow Jones Industrial Average ended Wednesday's trading session up 0.1% at 40,974.97. The S&P 500 lost 0.2% to 5520.07 and the Nasdaq 100 technology index fell 0.2% to 18,921.40. Investors remained sceptical even after the number of job openings in July fell to its lowest level since January 2021. Tuesday's ISM manufacturing index left investors cautious about an economic slowdown in the US. Today's services sector index is likely to provide further clues before all eyes turn to Friday's employment report.

In the Asia-Pacific region, markets were mixed after yesterday's sell-off, with Japan's Nikkei 225 and South Korea's Kospi among the biggest losers. The Nikkei fell 1.1% after Japanese pay data, which could give the Bank of Japan more room to raise interest rates. In South Korea, the Kospi lost 0.5%. In Australia, the S&P/ASX 200 was slightly higher at 0.2%. The Hang Seng Index traded 0.6% lower and the Shanghai Composite was down 0.1%.

Yesterday, the Bank of Canada cut its benchmark interest rate for the third time in a row since June, by 25 basis points to 4.25%. The cut was widely expected and was justified by the continued easing of overall inflationary pressures.

In Europe, yesterday's purchasing managers' surveys provided an indication of the state of the service sector and, in the eurozone, the manufacturing sector. In the euro area, the purchasing managers' index for the manufacturing and services sectors rose to 51 points in August. The increase from 50.2 points in July was therefore rather small. In the United Kingdom, at 53.7 points, the services purchasing managers' index was above 50 for the tenth consecutive month in August. Readings above 50 signal expansion. Improving economic conditions and domestic political stability have allowed the performance of the UK services sector to recover. The value signals a solid upturn in the services sector but is slightly below the survey's long-term average (54.4). European stock markets remained under pressure. The EuroStoxx 50 lost 1.3% to close at 4848.18 points. In Switzerland, stock markets also fell sharply on concerns about the US economy. The leading SMI index closed 1.4% lower at 12,176.17 points.

Corporate and macroeconomic calendars

Corporate news in focus: There is no important corporate news today.

Economic data in focus:  Retail sales Europe, ADP employment change USA, initial jobless claims USA, S&P Global PMI overall index, ISM non-manufacturing USA. 

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

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