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Analysis News:::2020-07-31

America, Asia, and Europe stock markets remain in an irresolute movement


Growth could not slide through the Asia-Pacific stock exchanges on Friday as decline took place in almost all directions. The reason for the negative dynamics was the very unconvincing statistics on the economic growth of the United States of America, as well as the employment market in the country.

According to the latest data, the level of the US gross domestic product in the second quarter decreased significantly by 32.9% on an annualized basis. This was a huge collapse, which has never been encountered in the entire history of this indicator research. It should be noted that the initial expectation of the experts would be around 34.1% or even 34.6%. However, the real figures also did not inspire the stock markets too much, as they reflected the obvious problems in the country's economy that need to be addressed urgently.

The data on the unemployment rate in the USA were not too good either. As it turned out, the number of new applications for benefits has become higher, which indicates an increase for the second week in a row. The number of workers who were sent on unplanned and unpaid leave associated with the closure of bars, restaurants and other establishments in the southern and western states of the state is also growing amid the ongoing coronavirus pandemic. All this leads analysts to say that the unemployment rate in the country in the second month of July will be even higher than previously expected.

Japan's Nikkei 225 index began to decline Friday morning by about 2.82%. Even very good data on the Japanese labor market could not support the indicator. Thus, the unemployment rate in the country in the first month of the summer decreased to 2.8%, while earlier it was at the level of 2.9%. Economists were preparing for a more serious failure of the indicator, believing that it will drop to the 3.1% region. Despite clear progress, the indicator is still higher than last year's level of 2.3%, which means that the problem has not yet been resolved.

Another important indicator of the labor market is the number of applicants for available vacancies. In June, there were 111 available jobs for every 100 applicants in Japan. This was evidence of a decline, since a month earlier their ratio was 100 to 120. The current level has become the lowest over the past almost six years.

The volume of Japanese industrial production in the first month of summer increased which happened for the first time in the past five months. The increase was 2.7% compared to previous data, while analysts were preparing for an increase of no more than 1.2%. However, on a yearly basis, this indicator showed a drop of 17.7%, while experts argued that it would not fall below 17%.

China's Shanghai Composite Index rose 0.55%, unlike its Japanese counterpart. The Hong Kong Hang Seng index did not support the positive trend of China and dropped by 0.1%.

The PMI index in the Chinese processing industry for the second month of the summer was able to increase and reach 51.1 points, while a month earlier its level was 50.9 points. At the same time, preliminary data indicated a possible reduction of the indicator to 50.7 points. Recall that the level above 50 points is evidence of the growth of business activity in the field, which means that things are on the mend in China, especially since the growth has been observed for the fifth month in a row after the massive collapse occurred against the backdrop of the COVID-19 pandemic. Companies are gradually returning to their usual way of life and increasing the pace of activity.

The index of business activity in the construction and services of the PRC is also growing. In July it has already reached 54.2 points, while in the first month of summer it was 54.2 points. Here, the fifth growth in a row was also recorded.

South Korea's Kospi index moved down and fell to 0.78%.

The Australian S & P / ASX 200 index supported the negative trend and declined even more - by 2.5%.

At the end of the trading in the US stock markets on Friday, a single vector of movement could not be determined and parted on different sides. Thus, the Dow Jones and S&P 500 stock indicators were marked by a reduction, while the Nasdaq Composite grew on the background of an increase in the value of shares of a number of companies in the technology sector.

The Dow Jones Industrial Average fell by 0.85% or 225.92 points, which sent it to the area of 26,313.65 points. During the trading day, the indicator's losses reached 550 points, which indicates high volatility in the market.

The Standard & Poor's 500 index was also in the negative declining by about 0.38% or 12.22 points, and the current level moved to the level of 3,246.22 points.

The Nasdaq Composite was the only one that felt support and rose by 0.43% or 44.87 points, which moved it to the level of 10,587.81 points. At the same time, a significant drop was recorded earlier up to 10,412.09 points.

Despite some pullback, the indicators were unable to move below their minimum session values. The main influence on them will now have the reporting on the work of the largest US companies, which still continues to appear in the press. Since the policy to stimulate the country's economy has not yet been fully determined by the government, and the statistics on economic growth are poor, investors are waiting for positive signals from the corporate sector.

Meanwhile, the European stock exchanges went on positive dynamics is almost everywhere, the reason for which was the good statistics from the largest companies in Europe. Even the growing fears of a slowdown in the growth rate of the EU economy amid the global coronavirus pandemic could not interrupt the enthusiasm of investors.

The general index of the largest enterprises in the European region Stoxx Europe 600 began to grow by 0.79%, and as a result, was at around 362.36 points. However, yesterday the indicator was in a deep negative and declined by 2.2% becoming the maximum for a day over the past four weeks. However, it may show a slight drop of 0.2% by the end of the month.

The UK FTSE 100 Index rose 0.31%. The German DAX Index climbed 0.74%. France's CAC 40 index rose 0.6%. The Italian FTSE MIB index was the leader of growth with 1.04%. On the other hand, Spain's IBEX 35 index is the only one that has moved backward: it fell by 0.13%.

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