US factory activity hits 2-year low sparking economic slowdown worries
US manufacturing activity slowed to a 24-month-low in December, revealing concerns over a slowing economy
Data released on Thursday from The Institute for Supply Management (ISM) has revealed US manufacturing sectors declined last month.
The report revealed its index of national factory activity fell 5.2 points to 54.1 in December, marking the lowest reading since 2016.
IG market analyst, Kyle Roda says the ISM data showed lower than expected results.
‘It added fuel to the notion that a cyclical economic slowdown in both the US and China, exacerbated by those two countries’ trade-war, is upon us.’ Mr Rodda said.
The ISM’s new orders sub-index dropped 11 points to 51.1 in December marking its lowest since August 2016, with the factory employment measure plunging to 56.2 in December, down from 58.4 in November.
The report revealed that ongoing issues with tariffs between US and China had caused long-term concern for machinery makers, with cost and sourcing strategies being questioned.
US Stocks fall upon data
US stocks and US treasury yields fell upon the weak ISM survey affecting the Dow Jones Industrial Average, touching a 600-point drop on Thursday.
Oil prices drop on economic concerns
US oil prices fell on Friday, with WTI crude futures down 27 cents at $46.82 per barrel at time of writing.
Analysts say oil prices are expected to see some support as OPEC supply cuts start to kick in. IG market analyst, Kyle Rodda says the economic data has driven traders from equities into safe havens.
‘Both European and US stocks were down, gold has burst higher to $US1293, the Yen has climbed across the board. Most significantly, US Treasuries have rallied, bending the yield curve into a very ugly shape, as traders price in the prospect of Fed rate cuts in 2019.’ Mr Rodda said.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. 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. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Please see important Research Disclaimer.
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.