© Reuters.
Investing.com – With the occasional negative forecast for the US economy due to the onset of a recession, the Manufacturing Purchasing Managers’ Index (PMI) data released by the Institute for Supply Management was published in negative, contrary to expectations .
On the other hand, US equities opened unusually higher, benefiting from dollar weakness and negative manufacturing data. As equities are trying to recover from the Fed shock, which inflicted record losses on equities.
Manufacturing PMI
(ISM) scored 50.9 points for the month of September, compared to expectations of a record 52.2.
While (ISM) scored 48.7 in September after he was estimated to have scored 53 points.
The Support Management Index (ISM) in the industrial sector determines the level of activity of purchasing managers in the industrial sector, and a reading above the 50 level indicates expansion and vice versa if it falls below 50 points.
To get a reading of this indicator, purchasing managers determine the level of certain elements of the industry, including employment, production, new orders, resource allocation and inventory. The uptrend has a positive impact on the country’s currency.
Currency traders are watching this indicator closely: Purchasing managers, due to the nature of their jobs, can access their companies’ performance data, making this indicator a leading indicator of overall economic performance.
lost trillions
Bank of America said global equity and bond markets have lost about 46.1 trillion of its market value since November 2021.
Michael Hartnett, chief investment analyst, said in a statement that the steep drop led to forced liquidations on Wall Street, which could explain the recent decline in the US market.
Hartnett believes the losses in global markets will not stop until the Federal Reserve ends its policy of raising interest rates in coordination with other central banks.
He pointed out that the losses in the equity and bond markets were due to rising interest rates and the shock of the quantitative squeeze by the Federal Reserve, which damaged what he called “liquidity dependence” in the market.
“Markets stop panicking when central banks start to panic, but the recent anxiety from banks in Japan and England is neither reliable nor coordinated,” he added.
sell 100 billion
Goldman Sachs strategists predict in a note that both households and foreigners will sell $ 100 billion in US stock next year, after making net purchases of the same amount this year.
As reported by “Bloomberg,” strategists said that household demand for shares – which is the main source of stock purchases since 2020 – turned negative, but slightly in the second quarter.
They also expected that companies would be the main source of demand for US stocks next year, albeit at a slower pace than 2022, with the potential to buy $ 500 billion worth of stock due to strong buybacks and new weak emissions.
They also noted that the relatively high valuations of US equities and a slowing economy will push foreign investors to sell net.
They said mutual funds have increased their cash allocations at the fastest pace since 2009 and expect mutual funds to sell US stock worth $ 300 billion next year.
stock up now
US equities made strong gains in early trading today, following the release of the manufacturing PMI data with a very negative reading.
It has now increased by 512 points, or about 1.8%, to record 29,237 points. The S&P index jumped 60 points, or about 1.7%, to 3,646 points.
While it increased by about 1.2%, or 134 points, to stand at 11101 points.
US equities were hit hard after the Fed’s decision to raise interest rates, and Fed members continued their hawkish statements about an impending rate hike as well.
gold now
The US dollar has jumped sharply in recent moments to levels close to $ 1680 an ounce, up 1%.
The futures contracts on the yellow metal have instead increased in these moments of today’s trading, equal to 1%, rising to levels close to 1688 dollars an ounce.
oil now
The US light crude NYMEX rose in these moments to levels of 84 dollars a barrel, by 5.5%.
On the other hand, it rose to $ 89 levels by 4.5% during these moments of trading today.
dollar now
The American fell in these moments after stocks, gold and oil exploded higher after negative data.
The dollar index is now approaching 111 levels, losing nearly 0.2%.
tie now
While the 10-year yield fell by around 4.5% to 3,630.
