Weak US economic data drove investors on the German stock market in the first half of the week. Fears of an economic slowdown in the USA are having a particularly negative impact on tech stocks.
Investors are now likely to focus on further economic data and, in particular, the publication of new US labor market data.
DAX Chart
Source: Tradingview
Purchasing Managers' Index for US industry disappoints - NVIDIA loses 279 billion dollars in just one day
The poor mood on the market was triggered on Tuesday by the Purchasing Managers' Index for US industry, which came in weaker than expected at 47.2 points in August and is therefore still below the growth threshold of 50 units.
NVIDIA shares lost around 9.5 percent on Tuesday, the highest daily loss of any US company. According to the Bloomberg news agency, the US Department of Justice has sent the company a subpoena. It is to investigate whether NVIDIA is making it more difficult to switch to other suppliers.
This Wednesday evening (20:00), the focus will be on the so-called "Beige Book" in the USA, which promises an overview of the current economic situation.
ADP data provide first indication of non-farm payrolls on Thursday - Focus on further US data
On Thursday, the ADP data should usually provide a first appetizer for the official US labor market report on Friday (14:15).
The weekly initial claims for US unemployment benefits could also attract interest (14:30).
The ISM index for the services sector will be in focus at 16:00. Following the publication of the manufacturing sector on Tuesday, the data is likely to be weighed on the gold scale.
Friday, however, promises plenty of potential for movement. At 11:00, the GDP growth rate for the eurozone will be published. According to a third estimate, economists expect an increase of 0.6%, after 0.5% in Q1 (compared to the same quarter last year).
Economists expect significant job growth after slump in July - NFPs as a yardstick
The non-farm payrolls (NFPs) are likely to decide the weal and woe in the afternoon (14:30).
If, as expected, the job market performs significantly better than expected compared to the previous month (160,000 vs. 114,000 new jobs), this could possibly ease the economic uncertainties. A month ago, a strangely weak US labor market report revived concerns about a recession in the US and caused unrest worldwide.
The unemployment rate is expected to reach 4.2 percent, compared to 4.3 percent in July.
All in all, the "NFPs" are likely to act as a stress test for the stock markets on both sides of the Atlantic.
