Stocks Limp Into Month-End With Jobs Data Looming: Markets Wrap
US stocks fell on the final day of an August that has seen everything from equities to Treasuries and commodities retreat as central banks around the globe stepped up their fights against inflation.
Investors have been scouring incoming data for clues on the Fed’s path after central bank officials said they’d continue to be aggressive to tamp down on inflation. While job openings data on Tuesday underscored the persistent tightness in the labor market, revamped ADP data on Wednesday showed US companies increased headcount at a relatively sluggish pace in August. All eyes will be on the job report on Friday for further policy clues.
“What’s clear is that predicting this market is not clean cut,” Angeline Newman, a managing director at UBS Global Wealth Management, said on Bloomberg Television. “We are living in a world where conflicting economic signals are making the path of monetary policy very difficult to determine.”
The Fed has now ditched its soft landing goal and is instead aiming for a “growth recession,” which would mean a protracted period of meager growth and rising unemployment.
Oil is heading for a third monthly drop — the longest losing run in more than two years — hampered by the likelihood of slower global growth.
Meanwhile, euro-area inflation accelerated to another all-time high, strengthening the case for the European Central Bank to consider a jumbo interest-rate hike when it meets next week. ECB Governing Council member Joachim Nagel urged a “strong” reaction. Money markets have now priced in 125 basis points of tightening from the ECB by October, which implies a half-point hike and a three-quarter point increase spread over its next two policy decisions.
Investors are also contending with mounting friction between Beijing and Taipei after Taiwanese soldiers fired shots to ward off civilian drones and evaluating the latest Chinese data, which indicated factory activity shrank for a second month. Power shortages, a property sector crisis and Covid outbreaks all took a toll.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept. 2
- China Caixin manufacturing PMI, Thursday
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
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Some of the main moves in markets:
- The S&P 500 fell 0.3% as of 11:06 a.m. New York time
- The Nasdaq 100 fell 0.3%
- The Dow Jones Industrial Average fell 0.3%
- The Stoxx Europe 600 fell 0.5%
- The MSCI World index fell 0.8%
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro rose 0.4% to $1.0054
- The British pound fell 0.1% to $1.1642
- The Japanese yen rose 0.1% to 138.62 per dollar
- The yield on 10-year Treasuries was little changed at 3.11%
- Germany’s 10-year yield advanced three basis points to 1.54%
- Britain’s 10-year yield advanced 11 basis points to 2.81%
- West Texas Intermediate crude fell 0.9% to $90.85 a barrel
- Gold futures fell 0.1% to $1,734.20 an ounce