Investors grow cautious: financial markets fear economic slowdown
Intermarket analysis suggests that investors are becoming increasingly cautious. Financial markets are beginning to fear a deterioration in the economic cycle. And while strong reactions are coming from China and Canada on the tariff front, today’s wait is for US jobs data. Equities still suffering, bonds on pause.
Our intermarket dashboards continue to show a picture of increasing investor risk aversion. The leading risk indicators (S&P500/Vix and T30/S&P500) are at their lowest levels since last autumn, while the Dow/Gold ratio is at a one-year low. The economic sentiment indicator (T30/Commodities) also falls to its lowest level since late 2024. Meanwhile, gold is starting to rise again against the dollar. At the moment, all three major asset classes are bearish, a (still temporary) situation which, in the intermarket analysis, indicates expectations of a deterioration in the economic cycle. The S&P500 is touching its long moving average, bonds are slowing down, driven by Germany and finally by the more dovish stance of the ECB.
On the macroeconomic front, today is the day of the US employment data. Investors expect the labour market to show considerable resilience, i.e. a positive signal for the economy.
Our forecast analysis continues to point to a very uncertain situation in the financial markets. Equities remain at risk, with some more positive signals for Europe and Asia. For bonds, the pause seen yesterday is confirmed. The valuations of the main currencies are confirmed. Volatility is rising slightly.
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NOTES AND WARNINGS
Data compiled by kbmeter.com. Analysis date: 7 March 2025 - 7:23 AM GMT+1
This content is provided for informational purposes only and should not be considered financial advice. All scores and assessments are based on the previous trading day’s closing prices. Futures indications refer to the date and time of the analysis.
