Daily Digest: Wednesday 2nd October
Europe
The UK’s FTSE 100 (FTSE) traded within a tight range through Wednesday, closing 14.21 points (0.17%) higher at 8,290.86. Meanwhile, shifting focus to the continent, the Pan-European STOXX 600 (STOXX) rose 0.26 points (0.05%) to 521.14, trading just over 7 points below its record highs. Similarly to Japanese markets, the main drivers of European action were external. Geopolitical tensions across the Middle East remain a concern for European investors, with British prime minister Sir Keir Starmer delivering remarks on recent Iranian military involvement in the area. Traders are also awaiting Friday’s final non-farm payroll report, which should provide a snapshot of the health of the US economy and potentially any inflationary issues into October.
USA
Despite geopolitical concerns and a week of key data releases, US equities moved higher. The S&P 500 ($SPX) closed slightly higher, rising 0.79 points (0.014%) to 5,709.54, while the Nasdaq 100 ($NDX) rose 29.28 points (0.15%) to 19,802.58, and the Dow rose ($INDU) 39.55 points (0.094%) to 42,196.52. ADP non-farm payroll figures suggest that during September, an additional 143,000 jobs were created and filled in the US, ahead of analyst expectations of 124,000. While this data is preliminary, final figures will be released on Friday, with current data implying that US economic growth remains strong. If this is the case, then attention will shift back to headline inflation data through October, as well as the positioning of the Fed ahead of their penultimate meet of 2024. US crude inventories were the second key data point of the session, as stocks rose by around 3.9 million barrels last week, against analyst estimates of inventory drawdowns. This increase suggests that authorities either capitalised on falling crude prices to increase stocks, or that nationwide demand slipped.
Rest of the World
Japanese equities moved lower through Tuesday. A move which was in part driven by a continuation of geopolitical tensions stemming from the Middle East. Any escalation of the current situation would likely lead to a broader regional conflict, prompting investors to withdraw capital from risk assets such as equities from their portfolios in favour of safe haven assets, such as gold. Additionally, domestic political uncertainty has weighed on market performances as the ruling liberal democrats oversee a transition of leadership. The Nikkei 225 (¥N225) fell 843.21 points (2.18%) to 37,808.76.
Chinese markets remained closed through Wednesday, as National Day celebrations continued. The Shanghai Stock Exchange Composite Index (¥SSE) will resume trading next week, opening at 3,336.50.
What to Watch Tomorrow
UK Final Services PMI
Eurozone Final Services PMI
US Unemployment Claims
US ISM Services PMI
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice