The US stock market yesterday showed a strong decline amid negative external background from China, where indexes continued to fall after weak data on manufacturing activity in the country. In addition, the negative was the decline in the US manufacturing PMI, which fell to 51.1, which was 1.5 worse than analysts' expectations. Construction spending in the country grew by 0.7% in July, which is 0.1% less than expected growth. Today, the course of trading will be affected by the news on factory orders (14:00 GMT), the labor market (12:30 GMT) and publication of the Beige Book (18:00 GMT). The main event of the week will be the release of an important report on the US labor market on Friday. We expect a high level of volatility in the coming weeks and despite the possibility of further decline, maintain a medium-term positive outlook.
Major stock indexes in Europe fell yesterday after the Chinese stock market and amid increasing investor confidence in raising interest rates in September by the US Federal Reserve. It should be noted that the manufacturing PMI in the euro zone fell by 0.1, to 52.4. At the same time the level of unemployment in the euro area fell to its lowest level since February 2012 - 10.9%, which is 0.2% better than analysts' expectations. Investors are waiting for tomorrow's press conference of the ECB President Mario Draghi and today we can see a correction after yesterday's fall in the markets of the region. Our medium-term outlook remains positive, but soon is possible a strong market movement in either direction.
Markets in the Asia-Pacific region today showed a decline, but the pace of decline has slowed. It is worth noting that investors continue to negatively assess the risks associated with the slowdown of the Chinese economy. At the moment, investors are increasing their positions with the expectation of closing the China's stock market on September 3 at the occasion of the completion of the Second World War. It is necessary to pay attention to the negative statistics for GDP growth in Australia, which in the second quarter was only 0.2%that is two times worse than expected. For the year, GDP grew by 2.0%, which is 0.2% less than the forecast. Decline in exports due to lower commodity prices and weakening demand in China remains a major negative factor for the Australian economy. We expect the uncertainty on the markets of the region in the near future and only after stabilization the growth can resume.