Global equities hit fresh records ahead of key NFP jobs report

Vrasidas Neofytou
Head of Investment Research

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Global equities started September in a positive mood, carrying the bullish momentum from August despite continued concerns over persistently high Delta Covid variant cases worldwide.

US stock indices posted multiple records in August, with the tech-heavy Nasdaq Composite outperforming the market by adding 4%, as investors piled back into growth and technology stocks.

The S&P 500 rose 3% for the month, lifted by strong second-quarter earnings, ongoing global economic recovery, reopening trades, and by a very accommodative Federal Reserve despite worries about inflationary pressure.

European indices have started the month with a 1% rise, holding just below their record highs, led by stocks that benefit from the economic reopening like retailers, airlines, and financials, despite the surge of euro zone’s inflation to a 10-year high of 3% in August.

Meanwhile, Asian-Pacific equities managed to recover from monthly lows as weaker economic data, higher raw material prices, and shipping costs were offset by hopes of more stimulus from central banks.

Asia’s economic activity lost momentum in August as a resurgence in coronavirus cases disrupted factory production and supply chains across the region, raising concerns over the economic recovery after the pandemic.

Market participants are now focused on August U.S. nonfarm payrolls data, which is scheduled to be released on Friday, for insight into the possible path of the Federal Reserve’s monetary policy.

A high print should see a tapering reaction in markets, while a weaker print will see Fed delaying its tapering for a few months. 

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