Markets fall but economic expansion “on the horizon”

Markets were mostly lower on Thursday.

The S&P 500 fell 0.4 percent, the STOXX Europe 600 fell 0.1 percent and the Shanghai Composite fell 0.4 percent.

ADP reported that US private employment gained 978,000 in May, the largest since June 2020.

Another report from the US showed that first-time claims for unemployment benefits totalled 385,000 for the week ended 29 May, the first time that jobless claims fell below 400,000 since the early days of the pandemic.

The Institute for Supply Management reported on Thursday that its services PMI rose to 64.0 in May, all-time high, from 62.7 in April.

Mike Loewengart, a managing director at E-Trade, said that “the economy is flashing some very real signs that this isn’t just a comeback—expansion mode could be on the horizon”.

Meanwhile, in the euro area, the final IHS Markit composite output index rose to 57.1 in May from 53.8 in April, driven by an acceleration of growth in services.

In China, though, the Caixin/Markit services PMI for May came in at 55.1, down from 56.3 in April.