Hints of distressed selling seen in stock markets this week
INVESTORS SIFT THROUGH MORE DATA TO GAUGE ECONOMIC STRENGTH
Even as markets saw an uptick in trading activity, with momentum building in technology and growthrelated stocks, investors will cautiously monitor more economic data amid a raging pandemic.
It’s a busy week ahead on the global economic calendar, with 73 economic statistic figures in focus in the week ending March 5. In the week prior, 52 stats had been in focus.
US stock market focus will shift to the weekly US jobless claim figures on Thursday ahead of the US Labour Department’s non-farm payroll report, to gauge how the world’s top economy is seen reacting to the prevalent Covid-19 health crisis.
US jobs data in focus
Analysts are of the opinion that investors should be prepared for how stocks markets may respond to the February labour report set to release at the end of next week, as these factors are tracked to weigh how economies in the rest of the world will stage a recovery post-pandemic.
So with US employment report being a highlight for global markets in the week ahead, it is expected to show 218,000 jobs added, or four times as many jobs were created in February than in January.
Stocks fell last week, as both the S&P and the Dow Jones Industrial Average shed roughly 2 per cent.
The indexes are still in positive territory for the year, but gains are at less than 2 per cent in 2021.
In the US, the Dow Jones ended last week down 1.78 per cent, while the S&P 500 dropped 2.45 per cent. The tech-heavy Nasdaq suffered the most last week after declining almost 5 per cent, despite Friday’s rise driven by a rebound in Big Tech stocks.
Mortgages
A rapid run-up in interest rates this month caught investors by surprise, with the benchmark 10-year yield, which influences mortgages and other loans in the US, was at 1.5 per cent Friday afternoon, about 15 basis points, above its level just a week earlier.
Analysts add that the rapid rise in bond yields has made stocks skittish, and that could be a factor in the week ahead, if interest rates continue to respond to improving data.
After a big surge Thursday, the 10-year yield traded on both sides of 1.50%, which is the consensus view of where yields would be at the end of the year, not the beginning.
Powell to speak
US Federal Reserve Chairman Jerome Powell speaks on the economy Thursday, and market strategists are expecting the run-up in yields to be addressed.