Today marks the first day of trading of the Greek stock market following a five-week period of closure and, as expected, selling was very heavy on the Athens Stock Exchange.
By Peter Martin
Monday, August 3, 2015
Banking stocks led losses, many falling the daily volatility limit of 30%. Things on Monday were looking a little more positive for the rest of the eurozone though: July's final manufacturing PMI for the European Union was slightly higher than the flash estimate at 52.4 and little-changed from June. While Greece's reading of 30.2 set a new record low and France worryingly remains just below the 50 mark that separates contraction from expansion, Italy bounced up to a 51-month high of 55.3. Overall growth is still a little more tepid than the ECB would want, but crucially the manufacturing sector is still expanding, which has positive connotations for growth of the overall eurozone economy.
Greece aside, stocks have been performing positively across Europe on Monday, with the German DAX climbing close to 1% and the French CAC 40 gaining 0.7%.
The highlight of the US macroeconomic calendar is on Friday with the release of July's employment situation, where a gain of 212,000 is expected for non-farm payrolls, but there are still a number of significant releases early in the week, including today. June personal income and outlay data was released pre-market and showed income rising at a faster pace than expected. The Commerce Department said personal income rose a better-than-expected 0.4% in June, but consumer spending rose just 0.2%, while May's consumer spending was revised down from a +0.9% change to +0.7%.
With consumer spending comprising a large portion of growth in overall GDP, this result suggests a loss of momentum in the economy at the end of the last quarter. An easing in consumer spending is likely to give the Fed pause in its considerations of when to introduce a rate hike, especially considering the benign inflationary environment. The PCE price index, a measure that is closely-followed by the FOMC, rose just 0.2% in June, easing from May's change of +0.3%, while the core index rose just 0.1%. The year-on-year change in the headline PCE price index is 0.3%, remaining far off the Fed's 2.0% target.
Widely-followed gauges of the US manufacturing sector were also released on Monday morning. The Institute of Supply Management said its manufacturing index fell to 52.7 in July from 53.5. Employment was an area of weakness, along with prices paid, though the forward-looking component of new orders climbed to 56.5, up from 56.0 in June.
Market's manufacturing PMI, meanwhile, improved slightly to 53.8 in July, from June's reading of 53.6. This was the same as the flash reading for July.
The performance of stocks on Wall Street was looking like a bit of a mixed bag in early trading. Shortly after the opening, the Dow Jones was down 20 points or 0.11% at 17,670 and the S&P 500 Index was flat at 2103.6, while the NASDAQ 100 gained 0.24% to 4600.1.
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