April 21, 2023 (MLN): European and US stock markets wobbled on Friday as dealers digested mixed data and looked forward to more corporate earnings reports, as APP reported.
The dollar fell against the pound and yen after Federal Reserve officials pressed their case for further rate hikes to battle stubborn inflation. Asian stock indices closed lower on fears of a prolonged downturn after data indicated the US economy was slowing down, it said.
Frankfurt and Paris's stocks flipped between gains and losses after purchasing managers' index (PMI) survey data showed eurozone business activity growth accelerated in April on the buoyant services sector — but manufacturing shrank. London, meanwhile, edged higher as investors eyed rebounding UK business activity despite sliding retail sales, it added.
"There was a consistent theme across today's euro-area PMIs. Activity levels surged in the services sector due to a robust demand backdrop, while manufacturing activity continued to contract," said Monex Europe analyst Simon Harvey.
Wall Street's main stock indices opened mixed, with the Dow edging higher. "This week's trade has been a picture of hesitancy in front of earnings reports next week from many of the mega-cap stocks that have led this year's advance and in the face of Fed officials talking about needing to raise rates further to bring inflation down," said Briefing.com analyst Patrick O'Hare.
US tech giants Amazon, Microsoft, Google parent Alphabet, and Facebook owner Meta are publishing results next week, along with a slew of other corporate titans, including Swiss banks UBS and Credit Suisse, food group Nestle and oil majors Total Energies and Chevron.
Fed expectations
In addition to keeping close tabs on the release of corporate earnings, investors are beginning to turn their attention to next month's Fed rate decision. The broad expectation is for another 25-basis-point hike. However, debate surrounds whether the Fed will lift again in June or decide to pause, particularly in light of last month's banking scare, which was widely regarded as a result of monetary tightening.
On Thursday, Philadelphia Fed chief Patrick Harker said "Some additional tightening may be needed to ensure the policy is restrictive enough" to support the Fed's dual mandate of keeping both unemployment and inflation low. The rate hikes would come as data is showing that the US economy is beginning to feel the weight of a year-long rate hike campaign by the Fed.
The closely-watched Philadelphia Fed Manufacturing Index fell more than expected and stood in contrast to a surprise surge in the New York Empire Fed Survey. That suggests inflation could come down, but there is a growing worry that a recession could be coming.
Copyright Mettis Link News
Posted on: 2023-04-21T21:22:35+05:00
