Growth fears begin to pressure Wall Street
Wall Street ended almost stable Thursday the day after a sharp rise caused by remarks deemed dovish by Jerome Powell. Traders failed to take advantage of PCE inflation slowing to a 10-month low. They preferred to focus on the fall of the ISM manufacturing index to 49%, in contraction territory for the first time since the start of the pandemic in May 2020, and the surge in layoff announcements according to the report on the “Challenger” job.
The ISM and the Challenger report penalized sentiment, but are hardly the only ones to paint a gloomy outlook for the economy. Chicago’s PMI fell to 37, a level that consistently coincided with a recession in the US economy. Separately, IMF Managing Director Kristalina Georgieva said global growth forecasts for 2023 have darkened further, with a growing risk of growth falling below 2%, which would be the first since. 2009 (excluding covid).
Growth fears are therefore gradually gaining the upper hand over inflation fears. The publication of the employment report in the United States this afternoon could therefore once again become the most influential economic data on the markets in the coming months.
The consensus expects only 200,000 job creations, which would be the lowest amount since January 2021, and an unemployment rate stable at 3.7%.
Daily Dow Jones price chart (CFD Wall Street) – key levels