News

Published: Apr 6, 2023
Updated: Apr 6, 2023

US Markets Fall Amid Renewed Fear of Recession and Weaker Economic Data

The US markets saw a renewed fear of recession as several economic data indicated weakness in the economy. The US services PMI fell, private payrolls rose below estimates, and bonds climbed while equities fell.

Weaker Economic Data:

The US services PMI fell to 51.2 in March from 55.1 in February, well below forecasts of 54.5. Private payrolls rose 145,000 in March, below all estimates. These data points indicated a slowdown in the US economy, which fueled fears of a possible recession.

Equities and Bonds:

As a result of the weaker-than-estimated economic data, the Nasdaq fell 1%, and S&P500 was lower, but it closed off session lows of 0.68%. On the other hand, the Dow managed some gains. The MSCI world index fell 0.4%, while US 10Y bond yield fell 4 bps to 3.30%.

Bank and Tech Shares:

Bank and Tech shares took a beating as a massive amount of money shifted to debt instruments. This shift in investment strategy caused the 10Y bond yield to drop to a 3- month low and 1.5% below the 3M yield.

Commodity Market:

The commodity market experienced significant gains as a result of the market shift. Gold prices rose above $2000, and WTI is trading well above $80. This is a clear indication that investors are looking for safe-haven assets.

Asian markets too follow suit over Recession fears

The KOSPI ,NIKKIE ,SENSEX opened lower on Thursday morning over negative global sentiments.

The US markets are in a precarious position, and the recent economic data has only added to the uncertainty. The shift to debt instruments has resulted in a drop in equity prices, causing significant losses for investors. The commodity market is showing signs of strength, but it remains to be seen whether it can sustain the momentum. Accordingly, investors should proceed with caution and consider diversifying their portfolios to mitigate risk