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Recession fears are being pushed further- Will the market gain momentum?  

recession fears are being pushed further

Stocks saw a mixed finish on Friday after the end of half-day trading session as the markets opened after the thanksgiving holiday. On Friday, S&P 500 went up by ~0.1% after fluctuating between small gains and losses for most part of the day. The Dow Jones went up by ~0.3% and Nasdaq composite was down by ~0.1%. Gains which were seen in health care, financial and energy sectors supported the market in mitigating losses in tech and communication services stocks. Shares of Nvidia and Alphabet led the intraday declines as they lost ~1.9% and ~1.3%, respectively. Talking about the big gainers in S&P 500, shares of CF Industries saw an increase of 2.6%, and Best Buy grew by ~2.2%.

Since recession fears are being pushed further, the indexes’ recent weekly gains exhibit a turnaround in sentiments of market in November after 3-month slide. Traders and global experts have now believed that inflation continues to cool off and has now reached a stage for the US Fed to finally end its market-impacting hikes to the interest rates. Inflation continues to soften, consumer spending has remained solid and the US economy is bracing itself for the recovery. Collectively, these measures have encouraged hopes, and expectations, that the US Fed even decide to cut the near-peak interest rates. 

S&P Global stated that flash U.S. Composite PMI Output Index, an index tracking manufacturing and services sectors, came in unchanged at ~50.7. This reading was seen because a modest increase in services sector activity mitigated the slowdown in the manufacturing sector. 

Reading of more than 50 exhibits expansion in private sector. As a result of lack of strong orders, the businesses decide to lay-off some workers due to which the survey’s employment index saw the contraction. Easing of the labor market should help the Federal Reserve’s fight against inflation. All these factors support the fact that recession fears are being pushed further. 

Euro zone government bond yields saw an increase higher, which exhibits about the pushback from ECB officials against speculation regarding the future rate cuts. The German’s 10-year government bond yield, which has been categorised as benchmark for euro area, saw an increase of 3 basis points to 1-1/2-week high. In the UK, sterling inched up to the highest since September. The Bank of England is expected to keep the interest rates at 15-year highs till late next summer.

However, Friday’s data exhibited that Japan’s core consumer inflation saw a slight increase in October, even though the increase was less than anticipated.

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