Market Update – 4th September 2024.

4th September 2024

This week has been relatively quiet on the economic data front, with U.S. markets in particular observing a shorter trading week due to Monday’s Labor Day holiday.

In China, investors have been digesting the latest PMI manufacturing data from Caixin. Released on Monday, the index showed a rise to 50.4 in August, up from 49.8 in July. A reading above 50 indicates expansion, while anything below signals contraction. While the Caixin survey contradicts the official PMI data released on Saturday, it’s worth noting that the survey focuses on smaller, export-oriented private firms. The report pointed to increased demand for new orders and intermediate goods, which helped stabilise employment for the first time in 11 months. Services PMI, which came in Wednesday at 51.6 for August illustrated a 0.5 drop from July, though still remaining in expansionary territory.

Meanwhile, on Tuesday, the World Bank revised its forecast for India’s economic growth, projecting a 7% increase for the current fiscal year, up from the previous estimate of 6.6%. The upward revision comes following a temporary slowdown in GDP growth to 6.7% from April to June due to the Model Code of Conduct put in place during elections. It is thought that increased government spending on infrastructure will push momentum forward. In July, Modi’s third term budget was presented to citizens, highlighting that state-led capital expenditure on infrastructure will remain unchanged from the $134 billion presented in the interim budget.

Coming up this week, traders will look forward to a raft of data providing insights into the US labour market. The most recent Job Openings and Labour Turnover will be released later today, private employment data will come Thursday and then finally non-farm payrolls on Friday, which markets expect to have increased by 165,000 for the month of August. The data will be watched closely by investors in forecasting what, if any, rate cut the Federal Reserve will implement in their September meeting.

Also this week we have US PMI data, final Eurozone GDP and Eurozone retail sales.

Nicola Tune, Portfolio Specialist