Investor mood turned more tentative ahead of the US jobs report
US stocks were mixed-to-lower on Thursday as risk demand continued to abate. The Nasdaq Composite added 0.11% to register a fifth consecutive winning day. The Dow Jones slipped 0.48% and the S&P 500 shed 0.16%. For the month, the Nasdaq gave up 2.17%, the Dow dropped 2.36% and the S&P 500 lost 1.77%. In individual stocks, Salesforce rallied nearly 3% after the company announced fiscal second-quarter results that exceeded expectations. On the data front, the core PCE index, a closely watched inflation indicator by the Fed, increased 0.2% month over month in July and 4.2% year over year, matching expectations.
In Asia, equities were mostly higher on Friday, but investors were cautious ahead of the US jobs report. The Shanghai Composite index gained 0.43% after the People’s Bank of China said that it will cut the foreign exchange reserve requirement ratio by 200 basis points to 4% from 6%, starting from September 15th. Japan’s Nikkei 225 added 0.41%, shrugging off weaker capital spending and manufacturing activity data. South Korea’s Kospi gained 0.29%. Bucking the trend, Australia’s ASX 200 fell 0.37%, weighed by softer-than-expected home loans data.
European stock markets were little changed at the open as investor mood turned more tentative ahead of the US jobs report due later in the day. In anticipation of the release, economists are forecasting 170,000 additions in July. Weak numbers could be a sign of a cooling labor market that could spur the Fed to pause rate hikes. The regional Stoxx 600 index opened 0.06% lower. In its fresh survey, Germany’s ifo Institute pointed at a deterioration in sentiment among automakers, thus pressuring auto stocks in early trading hours on Friday.
Meanwhile, the dollar retains a modest bullish bias after yesterday’s solid bounce. As such, the 103.00 mark served as a support zone that pushed the USD index back into positive territory. The greenback thus has settled around 103.50 on Friday, looking ready to extend the ascent. However, should the employment data disappoint, the selling pressure may reemerge later in the day. In this scenario, the dollar could retarget the 103.00 mark.