Here’s today’s ‘Just A Minute’ bringing you a 60 second summary of what’s happening in the financial markets:
Main Trading Event Of The Day: U.S. ISM Non-Manufacturing PMI @ 14.00 GMT
WHAT WE’RE WATCHING TODAY
U.S. Non-Manufacturing Index Data Awaited
The Institute for Supply Management’s Non-Manufacturing index is projected to climb to 54 in April from 53.1 a month earlier following the release of today’s data. The gain would follow an increase in the group’s manufacturing gauge that showed factories expanded in April at the fastest pace this year. In March, respondents noted activity was still being hampered by adverse weather, which, along with a strengthening in new orders, should support a slight pickup in April.
In addition to the first look at the ISM Non-Manufacturing Index for April, it is worth noting that Markit also revises the previously released flash estimate of its Services PMI for last month 15 minutes ahead of the ISM release today. Business activity in services has been a bit shaky compared to manufacturing pointing to a decelerating pace of growth in the flash data for April. Analysts are concerned that there are worrying signs for future momentum in the services sector. Levels of outstanding business fell at the fastest rate since last August, and firms’ optimism about the year ahead also waned. Another weak release for the services sector may raise new doubts about the spring economic revival.
Asian Stocks Fall After Weak China PMI Data
Asian stocks fell today following disappointing Chinese manufacturing data which missed estimates. HSBC’s final reading of manufacturing activity in the mainland came in at 48.1 for April, below the bank’s preliminary reading of 48.3. The figure marked a fourth straight month of contraction, in contrast to the country’s official PMI reading that showed a reading of 50.4. Hong Kong’s Hang Seng Index retreated 1.5 percent while the MSCI Asia Pacific excluding Japan Index slid 0.3 percent. Standard & Poor’s 500 Index futures were little changed with Euro Stoxx 50 Index futures. Gold gained and Ukrainian bonds extended their decline amid violence in the nation’s east. Analysts believe there’s a big risk of a deeper economic slowdown in China given the continued weakening in the manufacturing sector. Rebalancing the economy is a challenge for the government and the market is not sure what the government intends to do next. Markets in mainland China reopen today after holidays, while Japan and South Korea are closed until May 6.
U.S. Housing Rebound Stalls
The housing market in the US has been weak lately and appears to going downhill just when many economists thought it would be heading upward. Sales of previously owned properties fell 7.5 percent in March from the previous year, to the slowest pace in 20 months, while purchases of new houses sank 14.5 percent from February. Mortgage interest rates are rising from record lows as the Federal Reserve reduces its bond-buying program. The apparent crumbling in the housing recovery is slowing the economic recovery and has, at least temporarily, removed a valuable support to GDP growth. The cooling trend follows a decade of market turmoil. Fueled by lax subprime lending, prices soared from 2004 to 2006. When the bubble burst, prices fell 35 percent from their July 2006 high, and 5 million owners went through foreclosure, which left many of them unable to qualify for a mortgage. After rebounding from a March 2012 low, the S&P/Case-Shiller index of home prices in 20 cities is at 2004 levels. Analysts believe that it’s too early to say that the market’s recovery is faltering. They have taken an optimistic view that as investor demand starts to drop off, there will be an improvement in organic demand. If this does not happen by the middle of the year, we can expect to see a change in outlook.
That sums up today’s highlights! Keep watching for all the latest news of today’s trading events! Find us on Facebook, Twitter, Google+ and LinkedIn. We hope you have a profitable day on the markets.
