Top 5 Things to Know in the Market on Wednesday

Here are the top five things you need to know in financial markets on Wednesday, August 3:

1. Global Stocks Mostly Lower
Global stock markets experienced a decline, with one index marking its biggest one-day fall in a month due to disappointment over the fiscal stimulus package. However, another market managed to stay afloat thanks to a powerful state agency advocating for easier monetary policy. This downturn occurred alongside a wave of corporate earnings reports. Futures in the U.S. indicated a lower opening for the day, continuing the trend from the previous session. By mid-morning, key indexes showed slight decreases, with the blue-chip index down 28 points (0.15%), another index down 4 points (0.16%), and a third index trading down 8 points (0.17%).

2. Oil Rebounds with WTI Under $40 Ahead of Inventory Data
Oil prices saw a rebound, maintaining a position as investors anticipated upcoming weekly data on U.S. crude and refined product inventories. The U.S. Energy Information Administration is expected to release its inventory report later in the day, with predictions of a decrease of 1.4 million barrels. Following the market close on Tuesday, another agency reported a decline in U.S. oil inventories by 1.3 million barrels for the week ending July 29. Futures prices for oil rose by approximately 0.73% to $39.80, while another benchmark increased by 0.77% to $42.12.

3. China’s Service Sector Cools
China’s service sector showed signs of slowing in July, with diminished expansions in activity and new work leading companies to reduce their workforce for the first time in four months as they sought to manage costs. A private survey indicated that the Caixin/Markit Purchasing Managers’ Index (PMI) dropped to 51.7 in July, down from an 11-month high of 52.7 in June. Nevertheless, the composite reading that includes both manufacturing and services rose to 51.9, marking the highest level since 2014, thanks to improvements in the manufacturing sector.

4. ADP Employment and ISM Non-Manufacturing Data Ahead
The ADP report for July is set to be released, with analysts anticipating the addition of 170,000 jobs to payrolls. Despite its mixed record, investors will view this data as a preliminary indication of the upcoming official employment figures due later in the week. Additionally, the ISM non-manufacturing index will be published to assess activity within the U.S. service sector.

5. U.K. PMIs Suggest Recession Ahead of BoE Policy Decision
In the U.K., the seasonally adjusted PMI dropped to 47.4 last month, signaling potential economic slowdown. The chief economist at Markit noted that the combination of PMIs suggests a quarterly GDP decline of 0.4%. This data is expected to influence discussions at the Bank of England’s policy meeting on Thursday.