Market sentiment: RiskOn – 17 days
Recap of the past week:
The past week was defined by anticipation for Nvidia’s earnings report. While the results were excellent, they fell short of igniting a more robust rally in the markets. As a result, trading remained within a narrow range, partly due to the last week of summer holidays and the end of August. Interesting movements are happening in the US macroeconomic environment, which so far do not confirm the fears of recession that had led to a market correction earlier in the month. Market sentiment indicator remained in positive territory.
Outlook for the following week:
Let’s have a look at the following week from the economic calendar perspective.
Monday will start slowly, with US markets closed for Labor Day. However, we can expect some activity from Asia with the release of the Caixin Manufacturing PMI and updates from EU manufacturing PMI.
Tuesday will ramp up quickly with key data, including Switzerland’s CPI and Q2 GDP during the EU session, followed by the highly anticipated US ISM Manufacturing PMI.
Wednesday kicks off with the release of labour US labour market starting with JOLTS data, after Australian Q2 GDP, and Chinese Caixin Services PMI, alongside with US Factory Orders and the Fed’s Beige Book.
Thursday will focus on US labor market data, featuring Challenger Job Cuts, ADP employment, and weekly jobless claims. The day will also see the release of the ISM Services PMI.
Friday, the main macro day of the week, will start with the EU’s Industrial Production data for July and Q2 GDP updates. At the end of EU session, the critical US Non-Farm Payroll (NFP) and unemployment figures will be released, providing key insights into the state of the US labor market.
Long-term sentiment
Moodix sentiment has extended the current positive sentiment wave to its 17th day (see more on waves statistics). However, this week will present a significant challenge. A month ago, it was the NFP data that rattled the markets and sparked fears of a potential recession. This week, a series of macroeconomic figures will paint a more detailed picture of the shape of global economy. Any disappointment, especially with the NFP, could revive the negative sentiment from late July and early August. Markets expect NFP to come in at 163k (previously 114k). If the numbers stay close to last month’s, it would likely disappoint the markets.
Good luck! Team moodix!
