Markets continue to fret over a possible recession
Wall Street stocks rallied on Friday to start a new month and a quarter on positive footing. The Dow Jones Industrial Average and the S&P 500 added 1.1% each, and the Nasdaq Composite was up by 0.9%. Still, all of the three major indices posted their fourth down week in five. The Dow fell 1.3% for the week, the S&P 500 gave up 2.2%, and the Nasdaq finished lower by 4.1%. in individual stocks, shares of Micron Technology shed nearly 3% after the company said that it now expects smartphone sales to be meaningfully lower than previously expected for the rest of 2022.
Asian equity markets were mixed in muted trading on Monday as investors continued to fret over a possible recession. Data showing a rise in fresh Covid-19 cases in China added to market concerns – the country saw more than 700 new infections over the weekend. Still, the Shanghai Composite index managed to gain more than 0.5% during the session while Hong Kong’s Hang Seng shed 0.21%. In Japan, the Nikkei 225 added 0.84% and the South Korean Kospi gave up 0.22%.
In Europe, stocks opened higher today in a relatively quiet day for global markets given the July Fourth holiday in the United States. As such, US stock markets are closed for the public holiday today. There are also no major earnings or data releases in Europe on Monday, suggesting some short-term consolidation could be expected ahead of the major events of this week – FOMC meeting minutes and US jobs report due on Wednesday and Friday respectively.
Meanwhile, the USD index has settled in a tight trading range just above the 105.00 figure which remains in the market focus. The dollar holds steady after a brief rally above 105.50 on Friday. While the buck remains elevated for the time being, the upside momentum has slowed recently as US recession fears weigh even the safe-haven USD at this stage. Still, the dollar’s strong uptrend remains intact for the time being.