US Open: Main indices struggle for direction after mixed US data 🔎

• Wall Street opens slightly higher
• Strong ISM and PMI services data
• Insulet (PODD.US) CFO to step down and join 3M (MMM.US) healthcare company

Wall Street's main indexes began the day with gains as they opened higher on Wednesday. This was attributed to data indicating a cooling labor market and a retreat in U.S. Treasury yields from recent multi-year highs, which bolstered investor confidence. The Dow Jones Industrial Average increased by 0.12%, the S&P 500 opened 0.08% higher, and the Nasdaq Composite gained 0.30% at the opening bell.

Surce: xStation 5

PMI and ISM data

However, initial gains were erased after the publication of strong US ISM and PMI data, which came close to expectations but still indicate an expansion in this sector. Such strong figures, combined with the robust JOLTS data, definitely strengthen the argument for the Fed to consider one more hike and to maintain interest rates at a higher level for a longer period. On the other hand, it's worth noting a sharp decline in new orders, which could be a cause for concern as it suggests that strong demand might not persist much longer.

US ISM for services for september:

• PMI Actual 53.6 (Forecast 53.5, Previous 54.5)
• Employment Actual 53.4 (Forecast -, Previous 54.7)
• Prices Paid Actual 58.9 (Forecast -, Previous 58.9)
• New Orders Actual 51.8 (Forecast -, Previous 57.5)

PMI Services in the EU were also published in the first part of the day. Figures were generally better than expected and higher than initial readings but on average worse than in the US. Shortly after the publication the USD depreciated against the EUR and GBP.

• Spain: 50.5 (expected: 49.6; previous: 49.3)
• Italy: 49.9 (expected: 50; previous: 49.8)
• France: 44.4 (expected: 43.9; previous: 46)
• Germany: 50.3 (expected: 49.8; previous: 47.3)
• Eurozone: 48.7 (expected: 48.4; previous: 47.9)
• United Kingdom: 49.3 (expected: 49.5; previous: 47.2)

ADP Report

In September, the U.S. private sector added only 89,000 jobs, significantly below the forecast, marking the slowest growth since January 2021. This weaker labor market performance, alongside a notable decline in wages over the past year, suggests the Federal Reserve might have more flexibility to delay further rate hikes. Large businesses primarily contributed to this slowdown, offsetting their previous month's gains.

Top news

• The US economy shows signs of cooling off after a growth spurt earlier in the summer, with persistent inflationary pressures in the service sector, according to S&P's Chief Economist Williamson.

• The House voted to remove Republican Kevin McCarthy as House speaker, a significant move following his recent collaboration with Democrats to prevent a government shutdown.

• Russia plans to relax its diesel export ban soon, as reported by Kommersant, while Deputy Prime Minister Alexander Novak affirmed the effectiveness of the current restrictions.

Company News

Wayde McMillan will resign as CFO of Insulet Corp (PODD.US) on October 20 to become the financial chief of 3M's (MMM.US) healthcare unit, which is set to spin off as a separate listed company by the end of 2023. This unit specializes in wound care, oral care, and healthcare technology. While reaffirming its yearly sales projections, Insulet also confirmed that their accounting head, Lauren Budden, will act as interim CFO until a definitive replacement is chosen.

Source: xStation 5