US data adds to market woes
Today was a relatively important day for economic data, with the highlight the afternoon’s release of US ADP Nonfarm Employment change, which came in at 133,000, below the 148,000 that was anticipated. Initial Jobless Claims also came in higher than anticipated at 383,000, rising for the 4thsuccessive week. There was also a revision to the first quarter GDP, which came in at the anticipated 1.9%, compared to the previous reading of 2.2%, largely a result of lower government spending. The news caused European indices, some of which had traded close to 1% higher pre-announcement, to pare their gains, falling to just above the flat line.
Whilst market participants welcomed news to take the focus away from the eurozone, it wasn’t exactly what investors were looking for, with hiccups in the better performing US not welcome in an environment where there is fear of a catastrophe in Europe and a hard landing in China.
Yet more disappointing data from the US appeared to tip the scale and send indices into negative territory in the afternoon, with a Chicago Purchasing Managers Index coming in at 52.7 for May, form 56.2 in April. It fell short of economists’ expectations of a 56.5 reading.
The FTSE 100 drifted lower to finish roughly flat at 5296, recovering slightly from the lows that were reached shortly before the close. The major European and US indices were more comfortably into negative territory, and Brent Crude suffered another brutal fall, lower by 1.7% to $102/bbl, down nearly 15% on the month.
Admiral was the biggest faller on the FTSE100, after the Office for Fair Trading stated that it had found evidence of a dysfunctional car insurance market that may have pushed premiums up for drivers. Its recommendation that the private motor insurance market should be referred to the Competition Commission hurt the stock, which closed down 7% at 1039p.
This was posted in Bdaily's Members' News section by James .