Stocks benefited from optimism carried over to Europe from Asia and also after reports of better manufacturing giving hope that the global recession is easing. The positive sentiment was given a new impetus following a reading in line for the June ISM manufacturing data. However, the upward momentum was not sustained in the middle of the session on lower volumes as traders turned their attention to the NFP report today. Besides that, downbeat comments from GM in connection with the payment of creditors, as well as the news that California's governor has declared a state of "fiscal emergency", put more pressure on stocks later in the session. Finally, at the closing bell Dow closed down 0.68% at 8504.06, S & P 500 closed down 0.44% at 923.32 and NASDAQ100 closed 0.28% in 1481.34.
In fixed income
Bunds were lower during the early hours of trading after investors turned their attention to the threat of supply in the form of tips, notes 3.10 and the return 30y announcement tomorrow. However they later rallied as ADP raised concerns the next NFP report above analyst estimates.
Euribors had a very quiet day volume wise, as this week continues to be very light as traders are either away or treading less in this holiday shortened week for the US.
All eyes will be on the ECB and non farm payroll figures, after bad ADP numbers it wouldn't be surprising to see if we had a worse number, but I'm sure some government manipulations will ensure that won't happen!
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