The stock market day: recession fears are spreading

The stock market day
Recession fears are spreading

05.09.2024, 08:24

Traders expect cautious trading on the European stock exchanges on Thursday. DAX is expected to be below 18,600. The markets are now concentrating more and more on US labor market data and tending to ignore other impulses. Above all, the question is whether the US economy will slide into a recession or whether a soft landing can still be expected.

The data from the previous day is interpreted as being more recessionary: The Jolts report showed fewer job openings in the US than expected and the Fed's Beige Book showed that two-thirds of US districts reported unchanged or falling economic activity. In addition, the Bank of Canada lowered its interest rates and expressed concerns that the economy could be too weak and inflation could fall too quickly.

The ADP labor market report and the weekly US labor market data will therefore be watched with particular interest in the afternoon, before the grand finale with the monthly report on Friday. The important ISM service index is about both: it looks at the overall index as an economic indicator and also its job component. This is because the service sector is the most important employer in the USA.