China’s factory activity grew at the fastest pace in August since January 2011
US stocks finished on a mixed note overnight, but the major indexes posted their best August in decades. The Dow Jones Industrial Average fell 0.8%, the S&P 500 slid 0.2% while the Nasdaq continued to surge to fresh all-time highs. For the month, the Dow and the S&P 500 were up 7.6% and 7%, respectively. Apple and Tesla continued to rally as their stock splits when into effect on Monday. Today, the ISM manufacturing report will provide markets with a clue of how the American economy performed last month.
Asian stocks struggled for direction on Tuesday despite a private gauge of China’s factory activity growing at the fastest pace in August since January 2011. The Caixin Manufacturing Purchasing Managers’ Index rose for the fourth consecutive month to 53.1 from July’s 52.8 versus the median estimate of 52.5. Japan’s Nikkei 225 and Hong Kong’s Hang Seng indexes were flat, the Shanghai Composite gained 0.44% while Australia’s S&P/ASX 200 slid 1.76%.
In Europe, equities opened higher amid reports that the German government plans to revise higher its estimates on the economy. Meanwhile, the seasonally adjusted IHS Markit/CIPS UK manufacturing PMI was revised lower to 55.2 in August versus 55.3 expected and 55.3 initially. After the report, the UK FTSE 100 index dipped 0.90%. the index is lagging behind its counterparts in the region after a bank holiday on Monday.
Meanwhile, the greenback remains under heavy selling pressure, with the euro climbing to fresh more than two-year highs just below the 1.20 handle. Mixed economic data out of Germany and the Eurozone capped the rally in the common currency in recent trading but the pair could challenge the psychological level later today if the US ISM manufacturing PMI points to a sluggish recovery in business activity. On Friday, the key employment report will shed some light on the state of the American jobs market.
