US stock advanced on Friday and recovered some of the ground lost in Thursday’s session, as the late-day rebound might be exacerbated by low volume ahead of Monday’s holiday. The risk of a renewed selloff in equities is still high due to the pessimistic growth outlook, as investors are worried that the tighter monetary expectations in the face of higher inflation will lead to economic growth slowing and a possible recession. On the economic data side, the Institute for Supply Management’s US manufacturing PMI fell to 53 from 56.1 in May, which was the weakest since June 2020 and showed that the manufacturing activity in the US has weakened as new orders contracted. The market focus now shifts to this week’s minutes of the Federal Reserve’s June meeting, as the central bank is expected to raise interest rates by 75 basis points.
The benchmarks, S&P 500, Nasdaq 100 and the Dow Jones Industrial Average both rose on Friday despite the safe-haven US dollar advanced on recession fears. Nasdaq 100 was up 0.7% daily and the Dow Jones Industrial Average also advanced with a 1.0% gain for the day. All eleven sectors stayed in positive territory as the utilities and consumer discretionary sectors are the best performings among all groups, rising 2.48% and 1.97%, respectively. The S&P 500 climbed the most with a 1.1% gain on Friday and the MSCI World index rose 0.5%. For the week ahead, Nonfarm Payrolls will be the key data that might provide fresh impetus.
Main Pairs Movement
The US dollar advanced on Friday, rebounding from the 104.7 level that touched on Thursday and extending its rally toward the 105 area amid risk-off market sentiment. The DXY index was surrounded by bullish momentum during the first half of the day and reached a daily high near 105.6 level in the early US session, but then lost its bullish traction to surrender some of its daily gains. The safe-haven greenback continued to find demand amid escalating fears about a global recession, as the dismal US manufacturing PMI fueled recession-related concerns.
GBP/USD tumbled with a 0.70% loss on Friday amid the stronger US dollar across the board. The flight to safety increased the appetite for safe-haven assets and weighed on the GBP/USD pair. The cable remained under bearish pressure and dropped to a monthly low below the 1.199 mark, but then regained some upside traction to recover its daily losses. Meanwhile, EUR/USD slumped to the lowest level since June 15th below 1.038 level. The pair was down almost 0.50% for the day.
Gold rebounded back slightly after touching a daily low below $1786 in the late European session, as the US yields collapsed and provided support to the precious metal amid fears of a recession. Meanwhile, WTI oil climbed back to the $109 area despite the escalating recession fears that have overshadowed the supply worries again.
Economic Data for Today
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