02.06.2014 - Growth potential of stock markets is limited

Major U.S. indexes remained almost unchanged for the last trading session of the week. The reason for such result was the controversial macro statistics. Thus, personal consumer spending fell by 0.1% against the forecast of growth by 0.2%, and personal income - as it was expected, increased by 0.3%. The consumer confidence index rose slightly by 0.1 to 81.9. A positive signal for the market growth has become the growth of Chicago manufacturing PMI to 65.5 compared with an expected 60.8. Today, the course of trading may be affected by the data on the manufacturing PMI and construction spending in the U.S. in May (14:00 GMT). The main event of the week will be the release of data on unemployment in the U.S. on Friday. We expect the decline on the U.S. equity markets in the medium and long term.

Major European indexes have slightly changed over the last trading session of the previous week. Loss of the first half of the day caused by the fall in retail sales in Germany by 0.9% in April, were offset by positive data on the Chicago manufacturing PMI. Today we should pay attention to the data on manufacturing PMI of the euro area, and tomorrow is expected the rise in volatility due to the release of data on unemployment in the Eurozone. Markets expect the ECB's decision on new steps to fight low inflation, which can be announced on June 5. Further movement of the market will depend on the decision of the ECB on monetary policy.

Markets in the Asia-Pacific region mostly grow. The Japanese market is supported by a fall of the yen. Australian investors reacted positively to the news on the growth of manufacturing PMI to 49.2 in May, against 44.8 in April. At the same time, the number of construction permits fell in April by 5.6%, with an expected growth of 2.1%. Investors on Chinese markets were in no hurry to build up positions before tomorrow's statistics on the manufacturing PMI and non-manufacturing PMI. We expect the decline on the Australian and Chinese stock markets. Japanese index can be supported by further devaluation of the yen.

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