NEW YORK – Stock markets were mixed today, on the eve of a long Easter holiday and key US jobs data that could provide clues about whether the world’s biggest economy is headed towards recession.
European indices climbed along with Wall Street, where stocks shook off early weakness and finished higher. Asian markets were mixed.
“Growing recessionary concerns cast a pall over markets,” said analyst Richard Hunter at trading firm Interactive Investor.
“A number of US releases suggested that the economy is beginning to wilt under the pressure of the Federal Reserve’s (Fed) aggressive (interest rate) hiking policy, with attention now turning to the scale of a recession, rather than whether one will happen,” he said.
Today, investors’ focus will turn to the release of key US employment figures.
Fresh US government unemployment data yesterday showed that there were 228,000 new applications for unemployment aid last week, above analyst expectations.
And today’s jobs figures could be crucial to determining the Fed’s next interest rate decision.
All three major European markets and Hong Kong will be shut today and Monday for a four-day Easter holiday weekend.
Wall Street will be closed today but open on Monday, with Tokyo, Shanghai, and Shenzhen working on both days.
“The closure... on Friday means that equity traders will be unable to react to the release until next week which, coupled with the long weekend, has seen some traders squaring positions and being unwilling to open new ones given the extended break,” Hunter added.
Economic institutes earlier said that Germany would escape recession this year after all and grow 0.3%, while fresh data yesterday showed industrial production rose more than expected in Europe’s biggest economy in February.
But US data this week has been mostly weak.
On Wednesday, a report from the Institute for Supply Management showed that US services sector activity grew less than forecast last month, while a separate report pointed to private employers slowing their hiring pace in March.
While traders have long hoped for a tightening of the labour market and an economic slowdown that would allow the Fed to stop lifting rates, there is now rising concern of a recession.
International Monetary Fund chief Kristalina Georgieva said yesterday that a continued slowdown in almost all the world’s advanced economies is expected to drag global growth below 3% this year. – AFP, April 7, 2023
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