🧸Equity market failed to rebound📉

Spread the love

The final attempt in August has failed to lift equities higher. The equity market sustained its fourth losing streak as indexes began the day in green, only to fall red at closing. Selling pressure can be seen in the final few minutes of the trading.

The struggle to find a footing is real so is the market’s direction.

✏️August Job Data is key🍏

The Bureau of Labor Statistics will release the latest data on job employment on Friday. Most economists anticipate an addition of 318,000 jobs, much lower than the enormous 528,000 jobs seen in July.

Market participants want to see a cooling in the labour market as it might prompt the Fed to moderate its rate hikes so that it could boost a rally. Yesterday ADP jobs report, which begins the use of a new methodology for the first time, saw an addition of 132,000 private jobs added. Nonetheless, we expect the market to focus on Friday’s job report to a greater extent.

🏋Europe energy supply: A crisis is brewing🔭

Yet another downside risk to stable energy supply hit the region as Russia halts gas flow into Europe. This coincides with the latest release that Eurozone inflation climbed 9.1%. Energy price is the most significant contributor to the state of inflation.

Some note that the German power prices on Wednesday stood at around 16 times compared to the pre-Covid era. This means that a family that pays 250 euros may be paying 4000 euros monthly.

It is likely to create a new wave of inflation fear in the region at a time when the central bank is keen to tame inflation with rate hikes, similar to the path taken by the Fed.