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Rate hike fears persist


The last day of the month is not usually a very important date in market analysis since there are portfolio adjustment flows that do not correspond to fundamental factors. However, yesterday the weaker-than-expected ADP data was published and, along with a drop in oil prices, had a positive effect on the market, helping alleviate some concerns about inflation.

The national employment report from ADP showed that private payrolls increased by 132,000 jobs in August, below economists' forecast for job growth of 288,000. Yet yesterday was extremely volatile, with continual ups and downs and no clear direction for most assets.

Today, the first day of September, the ISM manufacturing PMI data for August will be published. Given the current circumstances in which the Federal Reserve has its sights set on the evolution of the US economy and inflation, the leading indicator will have relevance to the market performance. In this case, just like what may happen with tomorrow's NFP number, a weak figure could push back expectations of rate hikes and therefore be welcomed by stock markets. Paradoxically, negative data are viewed positively by the market.

Source: https://capex.com/en/overview/rate-hike-fears-persist
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