Global Markets Rebound Ahead of Key Reports, But Fundamentals Still Look Iffy

investing.com:

Sentiment was a little more cheerful during Tuesday’s session, following Monday’s recovery in stock and bond markets, and the return of the selling in precious metals and oil markets. European indices and US futures were trading higher as yields dipped further lower after the US 10-year could not hold above the key 5% level for long on Monday.

Echoing the “risk-on” sentiment, Bitcoin had extended its weekly advance to more than 15% at the time of writing, reaching above $35K for first time since May 2022 with expectations being rife about an imminent approval of a bitcoin ETF by the SEC.

Investors were also looking forward to the release of earnings from Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) today ahead of more tech earnings, key economic pointers and the ECB’s rate decision later in the week.

Global PMI data has been consistently very poor throughout much of this year, correctly highlighting a challenging macro backdrop with stagflation and high interest rates holding back the developed economies, most notably the Eurozone. Add the raised geopolitical risks to the equation, sentiment in the services sector was never going to improve materially.

And so, it proved.

The Eurozone services PMI fell 47.8 versus 48.7 previous and expected. The manufacturing PMI was down to 43.0 from 43.4 previously. On a country level, German services PMI fell sharply to 48.0 from 50.3 the month before, while the manufacturing PMI remained depressed at 40.7, albeit improving ever so slightly from 39.6. French PMIs remained well below the expansion threshold of 50.0.

The PMI is a leading indicator of economic health as purchasing managers possibly hold the most current and relevant insight into the company's view of the economy.