With minor intraday losses, the S&P 500 Futures break a seven-day uptrend.
The market benefitted from Friday’s US data.
Bulls are being probed by Covid problems and dismal China data as the US enjoys a long weekend.
During early Monday, S&P 500 Futures consolidate recent gains at 4,335, down 0.15 percent intraday. As a result, the risk barometer shows losses for the first time in eight days, owing to a quiet market and a drop in the US dollar.
The cause might be traced back to the coronavirus (COVID-19) outbreaks in Asia-Pacific, as well as concerns about the Fed’s next steps. Chia’s Caixin Services PMI, which fell to its lowest level in 14 months in June, is also contributing to the gloomy atmosphere.
The Delta strain of the virus is still wreaking havoc in Australia, with local lockdowns affecting more than half of the population. According to the most recent data, covid numbers have been steadily increasing in Sydney, Queensland, and New South Wales (NSW), with no new covid cases reported in Victoria. The same has increased the number of new cases by 46 so far in July 05, compared to 22 the day before. It’s worth mentioning that Indonesia has declared a state of emergency from July 2 to July 20, while Malaysia and Thailand have also reported recent pandemic resurgences.
In contrast, the China Caixin Services PMI for June fell to 50.3, its lowest level since May 2020, from 55.1 projected and 55.7 the month before. The second-tier data from Australia and New Zealand, on the other hand, was mixed.
The previous day, global markets were upbeat after the US jobs report for June gave conflicting signals. The headline Nonfarm Payrolls (NFP) surpassed the 700K projection and was revised upwards from 583K previously. Though, analysts were worried by an increase in the unemployment rate to 5.9% from 5.8%, versus 5.7 percent market estimate, and no change in the participation rate of 61.6 percent, analysts were troubled in anticipating the Fed’s next moves. An extended holiday in the United States, on the other hand, confuses traders and dampens the spirit thereafter.
Moving on, the Fed’s and/or the ECB’s policy updates and indirect signals could keep market participants entertained during what is sure to be a dreary day.
Also see: Market Inflection Points/n
