Market update: Markets in a positive but guarded mood – 02.12.2013

Source: Henderson Global Investors

Amid thin holiday trading and a shortened session on Wall Street on Friday, the Dow Jones and the S&P 500 indices closed down 0.1%, but the Nasdaq index received a boost from the technology sector, closing up 0.4%. Investors are perhaps being cautious in adding new positions as markets await a plethora of data from the US this week. Among these the Federal Reserve (Fed) releases its Beige Book on Wednesday giving a summary of current economic conditions, while November’s non-farm payroll numbers are out on Friday. Either report could signal a reduction in bond buying (tapering) by the Fed before year-end.

Asian markets generally traded lower on Monday focusing on the US data to come this week. There was good news overnight as the expansion in Asia’s manufacturing sector held up in November. Many of the Purchasing Managers’ Index (PMI) releases remained at multi-month highs; those from China (both the official PMI and the HSBC/Markit) came above economists’ forecasts. Chinese shares pulled back after initial gains on news of a relaxation in initial public offering (IPO) restrictions that raised fears of a flood of supply.

European markets are in a guarded mood this morning. At the time of writing, the FTSE Eurofirst 300 was down 0.2%, and the FTSE 100 was lower by 0.5%. In addition to the US data, investors await PMI releases in Europe and two central bank meetings as the European Central Bank and the Bank of England both meet on Thursday.