Market Commentary | Mixed, mixed, mixed (and NFPs)

Thursday stock market recap – Asia mixed, Europe mixed, US mixed. The news came from the data, specifically the ISM manufacturing index in the US. The index fell to 49.4 in August, below the growth threshold of 50 and therefore signaling a contraction. The dollar weakened and yields in 10-year US Treasuries fell, as investors (once again) re-adjusted their expectations for future interest rate increases.

Oil also fell, and looks set for the worst weekly drop since January, despite rumours and pressure from Russian President Vladimir Putin for a production freeze agreement at an upcoming OPEC meeting. The second-most popular commodity which made the news yesterday was orange juice. Tropical storm Hermine is making its way to Florida, the centre of the US citrus industry, pushing OJ futures to a 5-week high. The storm is reportedly strengthening, and will be the first hurricane to strike the state since Hurricane Katrina in 2005.

European shares are doing well so far today, but the headlines will be all for the release of US non-farm payroll data later on in the afternoon. Watch out for the numbers and the resulting impact on anything from US sovereign bonds, the US dollar and global stocks. As usual, it’s gonna be a rollercoaster.

IMF

Managing Director Christine Lagarde was not in the best of moods yesterday as she announced the IMF will likely downgrade its global growth forecast for 2016 – again – citing weak aggregate demand, widening inequality and declining trade and investment. The cut would be the sixth straight growth markdown in about 18 months.

Lagarde also argued that, while some potential global headaches such as Brexit and the Chinese slowdown have not as bad as initially expected (so far) but the issues are superficial when compared to the underlying worries about growth potential and productivity.

This article was issued by Andrew Martinelli, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt . The information, views and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.