US and European stock market futures are trading mostly higher, while the majority of the US and European stock indices remain in negative territory. Investors are largely confused about one particular factor: whether the current weakness in the stock market is only a correction or if the stock market rally that we experienced so far this year is over due to concerns over Chinese economic growth.
Stock market futures now
US and European futures are trading mostly higher, while the majority of the US and European stock indices remain in negative territory. Investors are largely confused about one particular factor: whether the current weakness in the stock market is only a correction or if the stock market rally that we experienced so far this year is over due to concerns over Chinese economic growth. There is no doubt that at the beginning of this year, there was a lot of hope among traders and investors that when the Chinese economy returned to normality from its COVID period, we would see strong demand. However, Chinese economic activity has been weak, and China has stopped reporting some important economic figures, which is going to make investors a lot more sceptical about everything. Having said this, one consistent message that we continue to hear from China is that regulators and policymakers continue to support economic growth with more favourable policies. The other particular worry for traders and investors is whether the fear of inflation is over. So far, investors have seen a strong downward trend in the inflation numbers, which has caused the Fed to take the foot off the gas pedal when it comes to their interest rate hike cycle. Many traders believe that the Fed will not increase rates any further as inflation seems to be under control, although it is still running much above the Fed target. One thing that investors do pay close attention to is the economic data, as the Fed and other central banks’ policies continue to remain highly dependent on the economic data, and it is the data that will determine and explain if the US economy is heading for a soft landing, which is the wider base case, or if the markets are going to go somewhere else. Today is mainly going to be about flash PMI numbers, which will be released out of Europe, the UK, and the US. Last month we saw weakness in the German manufacturing PMI numbers, and Germany is the most important economy of the Eurozone as it is considered the economic engine of the Eurozone. The expectations are for the German manufacturing number to show a slight improvement with a reading of 38.9 against the previous number of 38.8. The forecasts for the Eurozone Flash Manufacturing and Services PMI are 45.1 and 50.9, respectively. Later in the day, we are also going to get the same data set for the US, and the forecast for the flash manufacturing PMI is 48.9 and for the services PMI is 52.1. Gold The precious metal is in battle with an important price level of $1,900. The bulls are really trying their best to keep the price at this level, as it is considered an important level of support. The fresh comment from the Richmond Fed President made traders a little nervous again, as his message was very clear: traders should think carefully if they anticipate that the Fed is done with their interest rate hike cycle. The dollar index is the main dominant force for the time being, and any weakness in the dollar index represents an opportunity for gold prices to move higher.There is no doubt that at the beginning of this year, there was a lot of hope among traders and investors that when the Chinese economy returned to normality from its COVID period, we would see strong demand. However, Chinese economic activity has been weak, and China has stopped reporting some important economic figures, which is going to make investors a lot more sceptical about everything. Having said this, one consistent message that we continue to hear from China is that regulators and policymakers continue to support economic growth with more favourable policies.
The other particular worry for traders and investors is whether the fear of inflation is over. So far, investors have seen a strong downward trend in the inflation numbers, which has caused the Fed to take the foot off the gas pedal when it comes to their interest rate hike cycle. Many traders believe that the Fed will not increase rates any further as inflation seems to be under control, although it is still running much above the Fed target.
One thing that investors do pay close attention to is the economic data, as the Fed and other central banks’ policies continue to remain highly dependent on the economic data, and it is the data that will determine and explain if the US economy is heading for a soft landing, which is the wider base case, or if the markets are going to go somewhere else.
Today is mainly going to be about flash PMI numbers, which will be released out of Europe, the UK, and the US. Last month we saw weakness in the German manufacturing PMI numbers, and Germany is the most important economy of the Eurozone as it is considered the economic engine of the Eurozone. The expectations are for the German manufacturing number to show a slight improvement with a reading of 38.9 against the previous number of 38.8. The forecasts for the Eurozone Flash Manufacturing and Services PMI are 45.1 and 50.9, respectively.
Later in the day, we are also going to get the same data set for the US, and the forecast for the flash manufacturing PMI is 48.9 and for the services PMI is 52.1.
Gold Prices
The precious metal is in battle with an important price level of $1,900. The bulls are really trying their best to keep the price at this level, as it is considered an important level of support. The fresh comment from the Richmond Fed President made traders a little nervous again, as his message was very clear: traders should think carefully if they anticipate that the Fed is done with their interest rate hike cycle.
Gold price now
The dollar index is the main dominant force for the time being, and any weakness in the dollar index represents an opportunity for gold prices to move higher.
