Global Stock Market – Weekly News and Analysis Report

 

Global Stock Market Weekly Analysis: Sept 4-8, 2023

 

The global stock market indexes mostly closed lower during the week. The world markets mainly focused on the economic data this week. The key indexes in the US, Europe, and Asian stock markets mostly ended lower during the week.

 

The US Stock Markets 

 

The US stock market indexes declined during the holiday-shortened week. The stock markets were closed on Monday on account of Labor Day. The equity benchmarks closed lower on a weekly basis, as some positive news for the economy became bad news for the markets. This week’s economic calendar was not heavy, investors focused mainly on ISM services activity and Jobless claim data during the week.

The data showed that ISM Services PMI reading unexpectedly jumped in August to its highest level since February. The report indicates that the new order expanded at a faster pace. Although order backlogs slipped into contraction, gains were broadly on new orders, employment, price, and production all expanded at a faster rate. 

Investors concerned renewed about the future path of the Federal Reserve’s interest rates after lower-than-expected initial jobless claims data released on Thursday. Investors worried that the Fed will keep the interest rates at elevated levels for a longer period. Although investors still expected that the Fed would pause interest rate hikes in the September meeting, the strong economic data suggests that there could be another rate hike in November.

The sharp fall in Apple-led tech and growth stocks dragged the S&P and Nasdaq during the week. The government of China widened the ban on iPhones to central government employees, state-owned companies, and other agencies last week. This dragged the Apple-led and other China exposure stocks, while the shares of Apple service providers all fell sharply during the week. 

 

European Stock Market Indexes

 

The European stock market indexes mostly closed lower this week, as investors fear that higher interest rates for the longer period could be pushing the economy into a slowdown. Barring the UK’s FTSE, all other major indexes in the region ended below their flat line during the week.

The market sentiments were hit after a slew of economic data indicated more signals that the eurozone economy continues to decline. The Eurozone Gross Domestic Product (GDP) growth was revised down to 0.1% in the second quarter due to the drop in exports, the initial estimation was 0.3% expansion. The retail sales volume also fell by 0.2% sequentially in July.

The Sentix investor sentiment index for the eurozone fell to –21.5 points in September from -18.9 points, reported in August. German Industrial production fell more than expected in July, for the third consecutive months, producing 0.8% less than the previous month. Though German inflation data eased in August to 6.1 as compared to the previous month but remains at higher levels.

The market sentiments in the UK were slightly better on the expectation of a possible rate hike pause. The Bank of England (BoE) Governor Andrew Bailey cast doubt upon a possible rate hike in the UK in a September 21 meeting. He told a parliamentary committee: “I think we are much nearer now to the top of the [interest rate] cycle.” 

 

Asian Stock Markets Updates.

 

The Asian stock market indexes mostly closed lower this week. Investors remained focused on the economic data from the US, China, and Europe this week. Indian stock market indexes closed on a strong note for the second consecutive week. You can read about the Indian stock market updates here.

 

Japan Stock Market

 

Japan’s Nikkei closed lower this week, as investors remain concerned about China’s economic slowdown and its impact on global demand. The economic data released during the week was not as per earlier expectations. 

Japan’s second-quarter gross domestic product (GDP) expanded 4.8% QoQ on an annualized basis, lower than the preliminary estimates of 6.0% growth and 5.5% by Reuter’s poll.

 

Chinese Stock Market

 

China’s stock markets closed lower for the week, as the latest economic indicators showed concerns about China’s economic slowdown. The private Caixin/S&P Global survey of services activity fell to a below expectation to 51.8 in August from lower the July’s 54.1. 

The trade data showed China’s exports fell 8.8% in August from a year earlier, softening from the sharp 14.5% drop in July. Imports shrank by 7.3%. Although data remains weak, it also indicates that China’s economy may be bottoming out after the government’s recent policy measures to boost demand.

In Hong Kong, the Hang Seng Index declined during the week that ended on Thursday. Hang Seng was closed on Friday due to Backstrom, Rains that flooded the city. 

 

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