Amid a temporary strengthening of the dollar index, major US stock indices declined yesterday. The Dow Jones index decreased by 0.11%, the S&P 500 index decreased by 0.13%, and the NASDAQ index lost 0.04% at the close of trading. 7 of the 11 sectors closed in the red zone. The technology and energy sectors declined most. But despite that, the S&P 500 index added almost 3% at the end of the month. It is the seventh month of growth in a row. And while the Fed is in no hurry to tighten its monetary policy, the rally is likely to continue. Investors’ attention is now focused on labor market data, which will be released later this week. The Federal Reserve relies on employment reports, so very good figures may provoke investors to start selling.
Amid the return of millions of employees from remote work to offices, shares of video conferencing service Zoom fell by more than 15% after the company signaled an earlier-than-expected decline in demand. Investors now expect the Q3 report period will not be so profitable as the previous ones.
European stock indices also showed negative dynamics on the last day of summer. The British FTSE 100 decreased by 0.4%, German DAX lost 0.3%, French CAC 40 decreased by 0.1%, Italian FTSE MIB and Spanish IBEX 35 decreased by 0.06% and 0.2% respectively. On the other hand, the FTSE 100 index showed its best month since April, while the European Stoxx 600 index grew for the seventh month in a row. The UK energy regulator has established a £450 million fund for innovative projects that will help the country reach its net-zero climate goals. Ryanair plans to transport more passengers this fall than it did in the summer, raising its plan for the next three months after restoring traffic. The inflation rate in Europe increased to 3% year-over-year, which is much higher than the target indicator of the European Central Bank of 2%. The new ECB program implies some deviation from the target, but what kind of deviation is acceptable and what is not is all at the discretion of officials.
It took nearly a month for gold to recover from a sharp drop in prices that had occurred at the beginning of August. At the end of the month, the price closed at +0.3%. And as far as the Fed puts off the cutting of the QE program, growth is likely to continue.
Aluminum reached its highest level in a decade due to high demand and concerns that China may cut production in an effort to reduce energy consumption and emissions.
According to the American Petroleum Institute, oil inventories fell by 4.045 million barrels last week, which was higher than analysts expected. Today, the OPEC+ meeting will be held, and the crude oil reserves data will be released. Volatility in oil prices will jump. Yesterday, Kuwait’s oil minister suggested that OPEC+ might decide to postpone plans of increasing production by 400,000 barrels per day. However, most analysts and refiners expect OPEC+ to stick to its plans to increase oil production gradually.
China’s recovery has slowed. The corporate growth has almost stopped, and the service sector is contracting. It is negatively affecting the dynamics of major Asian indices. Australia’s GDP increased by 0.7%, but economists are confident that we will witness more consequences of COVID-19 restrictions.
Main market quotes:
- S&P 500 (F) 4,522.68 −6.11 (−0.13%)
- Dow Jones 35,360.73 −39.11 (−0.11%)
- DAX 15,835.09 −52.22 (−0.33%)
- FTSE 100 7,119.70 −28.31 (−0.40%)
- USD Index 92.66 +0.11 (+0.12%)
Important events for today:
- Australia GDP (q/q) at 04:30 (GMT+3);
- Germany Manufacturing PMI (m/m) at 10:55 (GMT+3);
- Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
- UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
- Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
- US ADP Non-Farm Employment Change (m/m) at 15:15 (GMT+3);
- Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
- US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
- US Crude Oil Reserves (w/w) at 17:30 (GMT+3);
- OPEC+ Meetings (All day).
