31.05.2016 - The potential for further growth in the US market is limited
Futures on US stock indexes today show a decline after a holiday in the first day of the week. Earlier indexes rose on a background of the revision of the growth of US GDP to 0.8%, which is 0.1% better than the previous forecast. Today, the dynamics of trading will affect the data on personal income and spending of consumers (12:30 GMT), as well as the consumer confidence index from the Conference Board (14:00 GMT. The central event of the week will be the release of a report on US labor market on Friday. According to our forecast the US indices may show a substantial correction in the coming weeks.
European stock markets today show a slight change compared to yesterday's closing levels. British investors returned to the market after a long weekend. Today, was published the data on unemployment in the euro area, which has remained at around 10.2%. A preliminary report showed that the consumer price index in May was -0.1% vs. expected -0.2%. Investors were disappointed with news on reduction of retail sales in Germany by 0.9% compared with the expected growth of 1.0%. Our medium-term outlook remains positive, despite the likely correction in the near future.
Markets in the Asia-Pacific region today showed growth. The Chinese market is rising on speculation about additional stimulus measures by the government. In Japan, was published important statistics. Thus, the unemployment rate remained at 3.2%, household spending fell by 0.4% against the expected decline of 1.3%, but the volume of industrial production rose unexpectedly by 0.3%, compared with a forecasted fall by 1.4%. Tomorrow will be published data on GDP growth in Australia in the 1st quarter, the manufacturing PMI in China and Japan. Our medium-term outlook remains positive, but we want to mention the probability of correction in the near future and the risks associated with the growth of China's economy.