US equities remain steady

US stocks were mostly unchanged after a big recovery the day before, and the ADP job and ISM non-manufacturing numbers showed weakness.

The US job market indicator, ADP National Employment report, showed companies added fewer employees in February 139,000 than estimated 155,000, and the January number was revised lower from 127,000 to 175,000.

A separate ISM’s non-manufacturing showed service industries slowed in February. While the harsh weather might have contributed to some of these, it is difficult to ignore the fundamental weakness.

In Asia, the possible default from China remains as a headliner. Shanghai Chaori Solar Energy Science & Technology Company has an interest payment of $14.7m due for tomorrow and said it may not be able to meet the deadline. 

This has been the focal point for investors for the past three days, with heavy weights in the financial markets like George Soros weighing in. Comparisons have been made to the Lehman saga; however given the small scale of this debt it is unlikely to unravel to that level. The bigger issue is the possible further defaults in the Chinese corporate debt market.

Chinese equity indices were laggards yesterday on this news while investors dismissed the government’s GDP forecast of 7.5% for this year. The speculation from the announcement is Chinese leaders will allow growth to outweigh their ballooning debt of $21 trillion. 

Asian indices will have a mixed day while investors digest the geopolitical tensions, weakness in US economic data and stress in the Chinese bond market.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.