Looking ahead Tuesday, manufacturing data continues to pour in with releases due from the U.S., U.K., and eurozone.
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WALL STREET: The Dow Jones industrial average lost 78.57 points, or 0.4 percent, to 17,719.92 on worries over consumer spending. The Shanghai Composite Index added 0.1 percent to 3,458.95 and Hong Kong’s Hang Seng gained 0.2 percent to 22,416.61.
The Aussie was further aided after the Australian central bank skipped a chance on Tuesday to cut interest rates or talk down the currency afresh, enabling it to climb above 73 USA cents for the first time in over a month.
The jobs report is arguably the most important U.S. economic indicator due out before the Federal Reserve decides on December 16 whether or not to raise interest rates for the first time in almost a decade. Higher interest rates are good for banks because they can charge more to loan money. Roche rose 1.2 percent after Citigroup upgraded it to “buy” from “hold” while Morgan Stanley raised its price targets on Roche and GlaxoSmithKline. Morgan Stanley rose 66 cents, or 2 percent, to $34.96 and Goldman Sachs rose $1.26, or 0.7 percent, to $191.28. The Markit/Chartered Institute of Procurement & Supply Purchasing Managers’ Index for construction fell to 55.3 in November from 58.8 in October.
In London, the FTSE 100 rose 0.6% to end at 6,395.65 (http://www.marketwatch.com/story/bank-shares-lead-ftse-100-higher-after-boe-stress-test-2015-12-01), with bank stocks rising (http://www.marketwatch.com/story/uk-bank-stocks-jump-as-on-stress-test-relief-2015-12-01) as all seven of the country’s biggest banks passed the Bank of England’s annual health check.
The UK market was in positive territory on Wednesday, after Eurozone inflation held steady in November, pushing the case for further stimulus measures from the European Central bank.
Many analysts expect the European Central Bank to cut some deposit rates deeper below zero and expand the bond-buying program that it started in March.
In currencies, the euro was up 0.2% against the dollar at $1.0587 while the dollar was down 0.3% against the yen at Yen122.9760. A raft of US economic figures this week, culminating with Friday’s nonfarm payrolls report for November, could well cement market expectations for a hike.
The benchmark index has moved higher this week after plunging 5.5 percent Friday on news that several top brokerages were being investigated as part of a crackdown linked to the summer’s market rout.
Brent crude futures were down 0.7 percent at $44.30 a barrel while U.S. WTI crude futures were off 0.5 percent at $41.46 a barrel.
USA government bond prices rose. The U.S. dollar slipped to 122.85 yen from 123.25 yen on Monday on the Japanese economic data.
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Foreseeing a “real possibility” that the euro falls below $1, and combining that with more stable commodity prices, Roberts expects both eurozone growth and inflation could surprise on the upside by mid-2016.
