Labor Day to labor report as Sept kicks off
A look at the day ahead in U.S. and global markets from Mike Dolan
Wall Street gets September off to a late start with a holiday- shortened week that focusses squarely on the U.S. jobs market after last month's unemployment rate scare sparked a mini panic.
Returning from Monday's Labor Day holiday, U.S. markets seem in a more comfortable place than they were a month ago when July's outsize jump in the U.S. jobless rate to 4.3% re-ignited recession fears and aggravated a volatility squall.
The S&P500 .SPX has recovered all of those losses since, however, returning to within a whisker of July's record highs on Friday - even though futures ESc1 are slightly in the red ahead of Tuesday's opening bell.
As a roller-coaster August played out, the jump in the unemployment rate was downplayed as partly distorted and subsequent weekly jobless readings were much healthier - while the Federal Reserve clearly switched its focus to the labor market and all but confirmed a September interest rate cut.
The size of that Fed cut seems to be the only debate - with futures markets convinced of at least a quarter-point move on September 18 and pricing about a one-in-four chance of a larger reduction of 50 basis points. What's remained pretty constant over the past week or so has been the 100bp of Fed cuts in market pricing to the year-end - which would imply at least one 50bp Fed cut at one of its remaining 2024 meetings.
Critical to that thinking will be the August payrolls report on Friday, with consensus forecasts for a pick-up in jobs growth to 160,000 last month and a retreat in the jobless rate to 4.2%.
Before then we get a whole heap of other labor market soundings - private sector surveys and layoffs data for August, July job opening numbers and another weekly jobless readout.
But Tuesday kicks off with critical updates on recently ailing manufacturing - with ISM and S&P Global surveys on the U.S. factpory sector due. ISM's survey showed manufacturing employment contracting in July at its fastest pace since June 2020.
Part of the downturn in global manufacturing stems from the economic funk in China, where surveys released this weekend showed factory activity there sank to a six-month low in August and factory gate prices tumbled.
And the ripple effects from that are clearly felt in Europe, where the equivalent euro zone factory survey for August came in marginally above 'flash' estimates but still deep in the contraction mode it's been registering for two years solid.
The travails of manufacturing are weighing on commodity and energy prices, with crude oil prices CLc1 clocking year-on-year losses of almost 13% for the first time in 2024. The prospects of higher OPEC production next month adds to the pressure.
That alone keeps rate cut speculation on the boil, with the Bank of Canada expected to cut its main policy rate by 25 bps for a third straight meeting on Wednesday.
The Canadian dollar CAD= weakened into the meeting, with two more cuts this year expected after this week's easing.
The U.S. dollar .DXY was firmer more generally, with the index hitting its best levels since August 19, and the euro EUR= fell back to two-week lows as well.
U.S. Treasury yields were a touch firmer early on Tuesday going into the week's big economic releases.
European stocks were slightly in the red earlier and Chinese shares .CSI300 tried to find their footing after another lunge lower on Monday. China's CSI300 index has now underperformed MSCI's all-country index .MIWD00000PUS by a whopping 17% this year so far.
Aside from another dour manufacturing reading in China, shares in major Hong Kong property developer New World Development 0017.HK plunged 13% to a 21-year low after it estimated a net loss of as much as HK$20 billion ($2.6 billion) for the financial year that ended in June.
New World has one of the highest debt-to-equity ratios among Hong Kong's property developers and its plan to cut debt has been closely watched over the past year. While Hong Kong has not seen the big defaults on debt by property developers in mainland China, investors worry about weakening liquidity for the sector due to sluggish residential and commercial property markets.
In Europe, Volkswagen VOWG_p.DE on Monday said it's considering closing factories in Germany for the first time, in a move that shows the mounting price pressure Europe's top carmaker faces from Asian rivals.
Key developments that should provide more direction to U.S. markets later on Tuesday:
* US August manufacturing surveys from ISM and S&P Global, July construction spending; Brazil Q2 GDP, Mexico July jobless
* European Central Bank board member Kerstin af Jochnick and ECB bank supervisor Claudia Buch speak in Frankfurt
* US corporate earnings: Zscaler, GitLab, Healthequity, Ascendis Pharma, Hello, Sportsmans Warehouse
* US Treasury sells $81 billion of 3-month bills, $75 billion of 6-month bills and $50 billion of 12-month bills
September is often a bad month for stocks https://reut.rs/4cMHzqV
Slower hiring, but layoffs remain tempered https://reut.rs/3yXhs2L
US manufacturing surveys show big contraction in jobs in the sector https://tmsnrt.rs/3Xp12JP
U.S. inflation is cooling https://reut.rs/3Ta4TYQ
G10 interest rates - August 2024 https://reut.rs/4dJF8GR
By Mike Dolan, editing by Gareth Jones
mike.dolan@thomsonreuters.com
متعلقہ اثاثے
تازہ ترين خبريں
دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔
ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔
کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔
