The U.S. stock market closed yesterday's trading session with the fall of the major indexes. The reason for pessimism on the market was the decline of world economic growth forecasts by the World Bank. Thus, the report of the Bank noted that global GDP will grow in 2014 by 2.8%, while in January, analysts predicted that the growth will be 3.2%. Bad weather conditions in winter in North America and Ukrainian crisis will lead to a reduction in GDP growth in the world. Today, trading will depend on labor market data, retail sales (12:30 GMT), and business inventories of U.S. companies (14:00 GMT). We expect a correction on the U.S. stock market in the medium term.
Major European stock indexes fell amid the same World Bank forecast of global growth. The situation in Ukraine may adversely effect on the economies of Russia's partners in Europe. Furthermore, the negative impact on the German market had news about the worsening of earnings forecast on Lufthansa by 0.5 billion euros to 1.0 billion euros in 2014. The British market also declined despite strong data on the labor market, where the unemployment rate in April fell by 0.2% to 6.6%. Today we should pay attention to the monthly economic bulletin of the ECB (08:00 GMT) and data on industrial production in the Eurozone (09:00 GMT). We expect further correction on the stock markets in Europe in the medium term.
Most stock indexes of the Asia-Pacific region declined due to negative sentiment in the United States. Japanese market declines before the statement of the Bank of Japan which will be held tomorrow and according to experts will not lead to a softening of the Bank's policy. On the Chinese market has traditionally continued to decline shares of the building sector companies. Trading in Sydney was also held amid negative investorâs sentiment due to weak data on the labor market where unemployment remained at 5.8%, but the number of employed decreased by 4.8 thousand against an expected growth by 10.3 thousand. In the medium term we anticipate growth on the Japanese stock market and the fall in China and Australia.