Investors must seek new clues for growth in new economic data

Dubai: As the week begins with manufacturing data from several key economies, which will provide an insight into the world economy, economists anticipate some slowdown in recent economic strength.

The figures from the Purchasing Managers’ Index (PMIs) – economic indicators derived from monthly surveys of private sector companies – released next week will provide important insights into the state of the eurozone, UK and US economies. USA. data.

IHS Markit also noted that the PMIs will be the first major surveys to provide guidance on how business conditions changed in the aftermath of the US election, and at a time when the negative impact of new closures in many countries is being addressed. word. news about COVID-19 vaccines.

US markets closed for Thanksgiving

U.S. markets closed Thursday for Thanksgiving, a day after the market will carefully analyze a stream of U.S. data expected to enter. Stocks will meanwhile continue to focus on the growing virus outbreak and the potential for a rebound next year. , as soon as vaccines are distributed.

Markets are also looking at possible news about a fiscal stimulus package from the US, although it currently seems unlikely that any progress will be made with the trillion-dollar package before President-elect Joe Biden takes office on January 20.

More consolidation is expected

Analysts believe that the upcoming holiday shortening could be a period of consolidation for the stock market, as restrictions affect the economy during the important Thanksgiving holiday period. Important economic data in the coming week includes durable goods and personal income and spending.

IHS Markit looked at US PMI data to give the first snapshot of the world’s largest economy. “The October data showed that growth in operating activity accelerated to the strongest since May 2018, driven by the largest increase in operating sectors since April 2015 and a clear improvement in confidence in the business over the year ahead,” he said. IHS Markit added.

Markets weigh new infections, vaccine

“Global markets continue to be torn between the negative impact of rising coronavirus cases around the world and the prospect of vaccination in the new year,” explained Ole S. Hansen, head of Saxo Bank’s Commodity Strategy. “Since the vaccination of Pfizer / BioNTech and Moderna last week, the markets have been trying to focus on a recovery theme,” Hansen added.

“However, these prospects are still hampered by uncertainties regarding the timing of when vaccines will have a significant impact on the global community. Not least given the continuing increase in coronavirus cases around the world leading to reconnections and reduced mobility. has. “

More data from the UK, US, Eurozone

Analysts from the IHS Market believe that the Eurozone data will be eagerly awaited after the PMI of October showed that the region’s economy was weakening as the third quarter rebounded. ‘However, there were clear variations in performance, and Germany made the slowdown strong by reporting strong growth through manufacturing.

“In the United Kingdom, growth weakened significantly in October, and the further downturn in November is expected to hit the economy hard, threatening a downturn with double pressure. The data will also show the extent of stocktaking by companies before the end of the Brexit transition period. ”

Last month’s IHS Markit survey showed that companies lagged slightly behind in inventory building compared to the same time before ‘Brexit deadlines’ in March and October 2019.

UAE starts positive this week

Both rates hit the UAE on Sunday as investors continued to make weekly gains in markets worldwide that have an improved pandemic background.

The Dubai Financial Market (DFM) is up 0.4 percent, while the Abu Dhabi Securities Exchange (ADX) also made a similar profit. While the DFM ended up about 2 percent last week, the ADX rose about 1 percent.

Similar gains have been recorded in indices elsewhere in the GCC, with benchmarks in Kuwait, Qatar and Bahrain, all higher, while the region’s largest stock exchange – Saudi Arabia’s Tadawul – has largely traded.

Source: Gulf News

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