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Edited by Kamal531 at 22-12-2023 02:12 PM
US Latest Data Shows Unexpected Decline in November Markit Manufacturing PMI to Contraction Zone. After the data release, the US Dollar Index accelerated its decline, hitting a daily low of 103.36, with mixed movements in the three major US stock indices and a surge in cryptocurrencies, including Bitcoin, which briefly surpassed the $38,000 mark.
Stock Market: Mixed Performance in US Stocks
The US stock market witnessed mixed movements on Friday, with the Dow Jones Industrial Average rising by 100 points, the Nasdaq Composite Index declining, and trading activity subdued due to the shortened post-Thanksgiving trading hours.
The S&P 500 index dropped by less than 0.1%, the Dow Jones Industrial Average rose by 109 points or 0.3%, and the Nasdaq Composite Index fell by 0.3%.
Investors returned from the Thanksgiving holiday on Thursday, with shortened trading hours on Friday. Major US stock exchanges, including the New York Stock Exchange and Nasdaq, closed at 1 pm Eastern Time.
Given concerns about the sell-off in European bonds leading to worries about higher interest rates and Germany's borrowing challenges, the bond market is also expected to witness shortened trading. In this context, bond yields rose across the board, with the 10-year US Treasury yield increasing by 7 basis points to 4.482%.
Traditionally, lower trading volumes during this week could lead to increased market volatility. Nevertheless, major US stock indices are expected to rise by about 1% overall this week. According to FactSet data, this would mark the fourth consecutive week of gains for the S&P 500 index, the longest continuous rally since June.
Despite Nvidia's better-than-expected performance earlier this week, its stock price experienced a decline, dampening some enthusiasm in the market. However, November is set to be the best-performing month for the S&P 500 index since July 2022, following a robust rebound in the US stock market after declines in August, September, and October.
The market's rapid rebound has led some to question whether the stock market has transitioned from oversold to overbought in just three weeks. David Morrison, Senior Market Analyst at Trade Nation, commented in an email, The rebound since the end of October has been quite astonishing, recovering almost all losses from early August to the end of October in just one month. Too far, too fast?
Preliminary data for US manufacturing and services for November were released on Friday, marking the only notable report in a relatively dull economic data calendar. The initial reading for the US Markit Services PMI recorded 50.8, a four-month high, while the initial reading for the US Markit Manufacturing PMI declined by 0.6 points to 49.4, a three-month low.
The survey also indicated that employment in both US service providers and manufacturers declined for the first time since mid-2020, citing weak demand and rising costs in November.
The S&P Global Composite Employment Index declined by 1.6 points to 49.7, just below the expansion-contraction line. The composite indicator measuring overall business activity remained unchanged in November, staying just under 1 point above the 50 threshold for the fourth consecutive month.
Sian Jones, Chief Economist at S&P Global Market Intelligence, commented that businesses are cutting jobs for the first time in almost three and a half years in response to concerns about the outlook. Job cuts have extended beyond manufacturing, with service companies reporting a decline in the number of employees in November due to cost-saving measures. On a more positive note, input price inflation has slowed again, rising at the slowest pace in over three years. The impact of rising oil prices on manufacturing seems to be diminishing, and the inflation rate for manufacturing costs has slowed significantly. Although slightly rising, sales price inflation remains low relative to the average level of the past three years and is consistent with the Federal Reserve's 2% inflation target.
Next week, the favored inflation indicators of the Federal Reserve—the Personal Consumption Expenditures (PCE) index for October and other data—will be released.
As the holiday shopping season kicks off with Black Friday, retailers like Amazon, Walmart, and Target will be in focus. Some analysts expect the 2023 holiday shopping period to resemble pre-pandemic years, suggesting that sales may not be as impressive as post-pandemic years.
Forex Market: US Dollar Accelerates Decline, Major Non-US Currencies Rise
As investors bet that US interest rates have peaked, the US dollar fell on Friday, while the yen rose slightly. This came as Japan's core Consumer Price Index (CPI) increased, reinforcing the view that the Bank of Japan may soon taper monetary stimulus.
With US markets closed on Thursday for the Thanksgiving holiday and the shortened Black Friday trading session, forex markets maintained narrow trading ranges.
The US Dollar Index, which measures the dollar against six major currencies, fell by nearly 0.4% to 103.36, near the two-and-a-half-month low touched earlier this week at 103.17.
As the US dollar declined, major non-US currencies rose: GBP/USD rose above 1.26, reaching its highest level since September 5, with an intraday gain of 0 |
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Post time 30-11-2023 13:04:42