Market Overview

Source: Investing.com

The fact is that the yield of bonds in Germany is also growing, but is in a significantly negative area below -0.3% per annum on 10-year bonds. In France, they are approaching zero, although the yield level now is also still negative at -0.09%, as of noon on March 3. This upside move of European bond yields closer to zero, although not yet inside a positive area, also speaks of an alternative in the form of investments in the European stock market, which investors consider as a more attractive choice than before. It may be clearly seen in comparison with almost "dead" investments in non-profitable public debt assets, where investors simply park their money for safekeeping.

As to the overall Euro Stoxx 50 index, only this year's record has been broken so far, but it is probably only a matter of a longer time before the pre-virus levels are broken too. Even in Italy, the Manufacturing PMI came out at a very high 56.9 level vs the previous 2020 peak value of 53.8, which is important as the Italian population and economy were suffering much during the pandemic. The service sector may still be a weak unit, and this hurdle has not yet been overcome. Although just in the same Italy, the speed of recovery of the service sector was high enough in February, with the Services PMI is at 48.8 points, very close to the neutral boundary of 50.0 points, based on surveys of about 450 business executives in private sector Italian companies.

The French Services PMI showed 47.0 points only, but even this was higher than the average expectations of just 45.2 points, which was effective according to local expert polls. In Germany and in the euro area on average, the similar Service PMI index is still quite low, at 45.7 points. Because of this, the restaurant networks, entertainment and travelling companies, for example, may remain undervalued for some time, but they may also begin to gain momentum in advance, which is already happening with Norwegian Cruise Line Holdings stocks (+4.46% yesterday and +37% since the beginning of February).

In a budgetary statement later today, the U.K. finance minister Rishi Sunak is going to announce his plans on how to steer the country through what the government has said will be the final stages of restrictions, while avoiding any further damage to public finances. This may also attract more attention to some British assets. It is the vague prospects of lifting lockdowns that have so far held back the growth of British stock indices, but they may catch up with the handicap later in the coming months.

The potential of the U.S. stocks is somewhat frozen this week on average, perhaps due to concerns about the U.S. labour market data, which would be released on Friday, March 5. However, the specifics are that even weak data may not necessarily be very different from good data in terms of market impact, as the Fed's priorities in targeted employment levels may further convince the markets of the Fed's serious intentions to supply the national economy and the entire global financial system with freshly printed dollars for a long time.

Disclaimer:

Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.