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Services Beats Lift Dow Despite ADP Disappointment, FTSE Rises With Its Commoditie

Published 06/08/2020, 05:49
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Though the European readings were uniform in being worse than forecast, a pair of stronger than expected services PMIs out of the US helped keep the Western markets buoyant on Wednesday.

The Markit reading was revised from 49.6 to 50.0, suggesting stagnation over contraction, but with the ISM figure ducking an estimated month-on-month decline to post a robust 58.1.

This allowed the Dow Jones to storm out of the gates, surging to a near-2 month peak of 27100 following a 275 point increase.

Adding the positive sentiment was a comment from Donald Trump, stating that there will be ‘another big job number on Friday’. If the ADP nonfarm reading is anything to go by, however, that isn’t going to be the case.

At 167,000, the ADP (NASDAQ:ADP) figure was more than a million jobs off the 1.2 million forecast by analysts, and only a fraction of the 4.314 million reading seen the month previous. Estimates for Friday’s official nonfarm jobs report stand at 1.55 million.

With its miners in full swing – benefiting from another record-breaking, $2000 per ounce-crossing performance from gold – and oil up on a drop in US inventories, the FTSE matched the Dow Jones’s 1% rise, nearing 6100 in the process.

This despite the pound’s latest jump against the dollar, cable climbing 0.7% to a 6-month peak of $1.315 – that shows you how bad the greenback is fairing at the moment, given a no deal Brexit is still on the cards by the end of 2020.

Bruised, but not broken, by the morning’s service PMIs disappointments, the Eurozone indices remained in the green on Wednesday, but lagged behind their UK and US peers. The DAX rose 0.4% to 12650, with the CAC up 0.7% to 4920.

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