Spreadex Market Update
US data confirms global services slump, tips markets back into negative territory
Posting its first contraction since October 2013 the Markit services PMI managed to underperform the already low-bar set by the flash reading, coming in at 49.7 against the 49.8 expected; soon after the ISM non-manufacturing figure slipped month-on-month from 53.5 to 53.4 (admittedly, slightly higher than forecast) with factory orders rising back to 1.6% from -2.9% but crucially failing to match the 2.1% expected.
Add onto that the worst jobless claims figure for around 4 weeks and a significant miss in the non-farm productivity number, and the Fed was dealt another dovish blow ahead of the central bank’s meeting in a fortnight; we’ll see if the all-important non-farm jobs report adds to that sentiment tomorrow afternoon, with an improvement in the employment change figure (still expected below 200k) set to be countered by a wage growth tumble. Regardless there was little reason to cheer for the Dow, even with the prospect of no rate hike in the immediate future, the index falling 50 points after the bell.
With Brent Crude naughtily dipping its toe below $36.50 per barrel, and the sour taste of the morning’s services PMI lingering on investors’ tongues, there was little reason for the FTSE not to join in with the market’s collective sigh, widening its losses to around 30 points as the afternoon progressed. The Eurozone indices had the same idea, the DAX and CAC both falling by half a percent following their own respective data disappointments earlier in the day.
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