We are seeing stocks have a flat day along with US factory activity.
US Factory activity has rolled over markedly through the first half of this year, and there is as yet no real sign of any rebound. It may be hoped, however, that there are some early indications to suggest the manufacturing sector generally may be able to hold at around neutral.
This is nothing to be too excited about, however, as activity is very subdued indeed, and could still tip over the edge into a broad-based contraction phase. The Dallas Fed factory index, for instance, is already in deep contraction territory.
The US economic outlook remains problematic at its very best. Likely to sink further as sustained high prices across goods and services continue to eat into the pockets of already extremely pessimistic consumers.
Stocks consolidated recent falls, rather than displaying any real energy for a more enthusiastic rebound.
Markets have come down a long way, again, and very quickly. There are technical reasons for some buying here, on a medium-term basis, but if on this particular Friday stocks cannot show some real strength, the following weeks are likely to consist of further significant even sharpish downside.
New York trading today, after the falls, could set the tone for either a period of consolidation around these levels or a gathering momentum to the downside that becomes unstoppable.
It is as if the market has driven up to the edge of the cliff, and is unsure as to whether to tip over or not.
Market insights and analysis from Clifford Bennett, Chief Economist at ACY Securities
