27 Jun

The US stock market continues to decline due to recession fears. Natural gas is approaching $3

June 27, 2023

By JustMarkets 

At Monday’s close, the Dow Jones Index (US30) decreased by 0.04%, and the S&P 500 Index (US500) lost 0.45%. Technology Index NASDAQ (US100) fell by 1.16% yesterday. The stock market closed negative again due to recession fears.

Investors are now focused on the next interest rate move. While the Fed halted rate hikes this month, Chairman Jerome Powell said this does not mean the Central Bank is stopping further tightening, with the possibility of two more rate hikes this year, as the Fed is determined to get interest rates back on track to the 2% target rate.

Investors will also be watching closely as ECB head Christine Lagarde speaks alongside Fed Chair Jerome Powell and other global central bank governors at a panel discussion on Wednesday at the ECB’s annual forum in Sintra, Portugal. The topic of inflation and monetary policy will be the center of attention.

Equity markets in Europe traded without a single dynamic on Monday. German DAX (DE30) fell by 0.11%, French CAC 40 (FR40) added 0.29% yesterday, Spanish IBEX 35 (ES35) gained 0.09%, and British FTSE 100 (UK100) closed negative by 0.11%.

Despite Germany’s declining business climate, the Bundesbank said Monday in its monthly report that Germany’s recession will end next spring and gross domestic product will grow slightly in the second quarter. The Bundesbank also said that growth would be supported by the German industry’s ability to weather the continued decline in demand thanks to lower energy prices, the removal of supply bottlenecks, and a full order book.

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Gold prices rose slightly on Monday as the dollar declined ahead of the release of key PCE inflation data, which could determine the actions of the world’s major central banks in the coming weeks. Investors will get an update on the possible future trajectory of interest rates Friday after the release of May data on the Personal Consumption Price Index, the Federal Reserve’s preferred measure of inflation.

Natural gas hit March highs, approaching the $3 mark. The main catalyst for this upward move comes from the abnormal heat wave that has affected many southern US states, which has led to revisions in short-term inventory forecasts.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) fell by 0.25% yesterday, China’s FTSE China A50 (CHA50) lost 1.49%, Hong Kong’s Hang Seng (HK50) ended the day down by 0.51%, and Australia’s S&P/ASX 200 (AU200) ended Monday negative by 0.29%.

S&P Global lowered its forecast for China’s economic growth this year, highlighting the uneven nature of the country’s recovery from the pandemic. S&P now expects China’s GDP growth to be 5.2% in 2023, down from an earlier estimate of 5.5%. This was the first time the global rating agency had lowered its outlook for China this year, but it followed lowered forecasts by major investment banks, including Goldman Sachs.

Japanese Finance Minister Shunichi Suzuki continued to verbally warn about the yen’s depreciation on Tuesday, saying the government would respond accordingly if currency fluctuations become excessive.

S&P 500 (F) (US500) 4,328.82 −19.51 (−0.45%)

Dow Jones (US30)33,714.71 −12.72 (−0.038%)

DAX (DE40) 15,813.06 −16.88 (−0.11%)

FTSE 100 (UK100) 7,453.58 −8.29 (−0.11%)

USD Index 102.78 −0.13 (-0.12%)

Important events for today:
  • – Canada Consumer Price Index (m/m) at 15:30 (GMT+3);
  • – US Building Permits (m/m) at 15:30 (GMT+3);
  • – US Durable Goods Orders (m/m) at 15:30 (GMT+3);
  • – US New Home Sales (m/m) at 17:00 (GMT+3);
  • – US CB Consumer Confidence (m/m) at 17:00 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.


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