Stock markets continued to be caught between military escalation and diplomatic efforts in recent trading days. Investors now fear a resumption of hostilities between Iran and the United States. The markets are currently characterized by a "cat-and-mouse game" between hopes for diplomatic progress and concerns about renewed military escalation.
Temporarily distracted from the war in Iran, investors turned their attention to the earnings season on both sides of the Atlantic. As the week draws to a close, investors are looking ahead to the release of new US jobs data.
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Middle East conflict: US and Iran attack each other in the Strait of Hormuz
Geopolitical developments between Iran and the US continue to preoccupy investors. Both belligerent parties recently attacked each other in the Strait of Hormuz. According to US statements, however, they would continue to adhere to the ceasefire.
The ceasefire in the Middle East conflict has been in effect for about a month. However, military tensions are still considered extremely high. Whether a diplomatic solution will be reached between Washington and Tehran remains doubtful.
ISM Services PMI Disappoints – ADP Data Slightly Higher Than Expected
The ISM Services Purchasing Managers' Index (PMI) failed to meet prior expectations (53.7 points) with a total of 53.6 points, after registering 54 points in the previous month.
The so-called „JOLTs“ (Job Openings and Labor Turnover Survey) were at 6.887 million job openings, above expectations of 6.83 million units, following 6.88 million in the previous month.
ADP employment data recorded 109,000 positions above estimates (99,000), following 61,000 jobs in March. The development of employment in the US private sector could serve as a first preview of the official US labor market data.
US job data lower than expected compared to last month - Monetary policy signals possible
The focus this afternoon will be on the official US labor market data (Non-Farm Payrolls) at 2:30 PM. Economists expect an increase of 62,000 non-farm jobs, after 178,000 new jobs were created in the previous month.
The US unemployment rate is estimated to be 4.3 percent, unchanged from March.
Keep an eye on preliminary consumer sentiment data from the University of Michigan (4:00 PM).
Earnings season temporarily distracts investors from geopolitical concerns
The earnings season also remained in focus this week. In Germany, for example, the automotive group Continental (ISIN: DE0005439004) reported. Sales fell from 4.9 to 4.4 billion euros, the tire manufacturer stated. The background for this was particularly the purchase of company shares, it was further stated.
Adjusted EBIT rose by around 6 percent to 522 million from 492 million euros. „We started the year well operationally,“ said CEO Christian Kötz, according to a statement. At the same time, the outlook for the full year was confirmed.
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