Tuesday was the first day of September on Wall Street, since Monday the North American market farm for the celebration of Labor Day. This beginning of the month has not been exactly joyful, with corrections of more than 1% in the two main American referencesthe S&P 500 and the Nasdaq 100. Falls that have taken them away from the annual peaks (which were also historic) that they both marked in July.
Specifically, the S&P 500 fell 1.5%, after the last trading day (Friday, August 30), the index was just 0.3% away from reaching July highs. The Nasdaq 100’s correction was steeper, around 2.2%, which is its most bearish session since August 5, Black Monday in which worse-than-expected unemployment figures sparked fears of a recession in the United States.
Then, job creation fell to 114,000 jobs in July and unemployment rose to 4.3%. A figure that was interpreted with fear due to the deterioration of the labor market and the possibility of a contraction of the country’s economy. The data known at the beginning of August and that revolutionized the world markets (the Nikkei, the Japanese reference, lost 12.4% in a single session, the second most bearish day in its history) The unemployment rate for August will be published again on the 6th. Analysts expect could reach 4.1%, This is two tenths below the current figure. The day before the unemployment rate, USA will also announce the evolution of non-agricultural employment in the ADP National Employment Report. This data is relevant not only to the dollar, but also to the electoral moment the country finds itself in.
So, in a week when investors are waiting to know these figures, Tuesday also saw the publication of data on activity in factories in the United States, which, although they recovered somewhat in August compared to the previous month, continue to contract. The manufacturing indicator was located in the 47.2 points in its latest reading, above the 46.8 points of August, although somewhat below forecasts.
Against this backdrop, US benchmark indices continue to be the most optimistic among major stock markets, with an annual increase of around 16.7% for the S&P 500 and almost 14% for the Nasdaqagainst the balances of 8.6% of the EuroStoxx or 11.5% of the Ibex 35 so far in 2024.
Although the US Federal Reserve’s rate cut was already priced in by the market at the September meeting, the upcoming US labor market data “will give policymakers a sense of the need for further rate cuts after one almost certain cut in just over two weeks,” Mislav Matejka, senior strategist at JP Morgan, said in comments obtained by Bloomberg.
Wall Street drags Europe down
The fall in the American stock market pushed European indices lower, with losses of around 1% on the main markets. In fact, Tuesday’s correction broke the bullish sequence that marked the Ibex 35 for 20 days, in which each day it exceeded the minimum of the previous day.
Joan Cabrero, technical analyst and strategist of eco-merchantexplains that reaching this “temporary ceiling” is a logical step after the long sequence of purchases of the Ibex 35, and indicates that, until there is a drop to 11,000-10,850 points, there is no question of buying the Spanish stock market.
