On the New York Stock Exchange, the start to the final month of this year was subdued after two strong months. The Dow Jones Industrial closed -0.56% lower at 34,395.01 points while the broad S&P 500 was virtually unchanged at 4,076.57 points (-0.09%). On the Nasdaq, the indices also remained at the previous day's level at the close. The dominant theme remains the monetary policy of the Federal Reserve. A decisive factor for a next interest rate step on December 14 is the labor statistics from Washington due this afternoon at 14:30 (CET). Economists expect slightly weaker employment growth of 200,000 new jobs created in November. On the bond market, the yield on ten-year Treasuries fell to 3.52% because of the moderate pace promised by Fed Chairman Powell and the US dollar lost further ground against the euro.
In Asia, most stock indices fell before the weekend. Stocks in Tokyo led the losses in the region, with the Nikkei 225 losing around -1.8%. The Hang Seng Index in Hong Kong fell -0.64% and in mainland China, the Shanghai Composite traded around -0.4% lower shortly before the close. The focus is on Beijing's further action regarding the pandemic measures, whereby it remains unclear whether or how much the strict Covid-19 restrictions could be relaxed.
The Federal Reserve's preferred inflation indicator, PCE (Personal Consumption Expanditure), which is based on consumer spending, confirmed that inflationary pressures in the US have recently weakened again somewhat. Although the indicator remained at a high-level year-on-year, it declined from +6.3% in September to +6.0% in October. Excluding energy and food prices, the core index declined from +5.2% to +5.0%.
The Institute for Supply Management's (ISM) Purchasing Managers Index fell to 49.0 points in November from 50.2 (consensus 49.7), the lowest reading since May 2020, signaling a contraction in activity in the American manufacturing sector.
Industrial companies in the eurozone surveyed by S&P Global were more optimistic, with the Purchasing Managers' Index improving to 47.1 points in November from 46.4 in the previous month. However, the leading indicator remains well below the 50 line that separates sector growth from contraction. The intensity of the downturn in the euro-area manufacturing sector had weakened in November, giving hope that eurozone industry is not facing such a sharp downturn in the winter as initially assumed. On the other hand, uncertainty about energy supplies remains, S&P chief economist Chris Williamson said.
The UK's Purchasing Managers' Index for the industrial sector rose 0.3 points to 46.5 in November but remained below the expansion threshold of 50 points for the fourth month in a row. The sector continues to suffer from weak demand as well as high energy prices and material shortages, S&P Global commented.
|08:00||GE||Exports (October, m/m)||-0.5%|
|08:00||GE||Imports (October, m/m)||-2.3%|
|08:45||FR||Industrial Production (October, m/m)||-0.8%|
|11:00||EZ||Producer Prices (October, y/y)||+41.95|
|14:30||US||Unemplomyent Rate (November)||3.7%|
|14:30||US||Non-Farm Payrolls (November)||+261,000|
|14:30||US||Average Hourly Earnings (November, y/y)||+4.7%|
|14:30||GE||Bundesbank President Nagel speaks|
|GE||Deutsche Boerse Periodic review DAX composition|
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Editor: Alessandro Fezzi, E-Mail: email@example.com
Source: LGT Bank (Switzerland) Ltd.
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