EconomyUS stocks open lower as weak China data compound...

US stocks open lower as weak China data compound growth concerns

Wall Street stocks opened lower on Monday as weak economic data from China darkened the global growth outlook.

Following the longest string of weekly losses for global equities since the 2008 financial crisis, the benchmark S&P 500 share index fell 0.9 per cent in choppy trading. The technology-focused Nasdaq Composite lost 1.1 per cent.

The FTSE All World share index has dropped almost 12 per cent since the end of March as soaring inflation has driven central banks to raise interest rates, with investors becoming concerned that large economies are not strong enough to withstand higher borrowing costs. The S&P has closed lower for six consecutive weeks.

“It’s a pretty ugly combination of financial conditions tightening into slowing growth,” added Hani Redha, multi-asset portfolio manager at PineBridge Investments. “There are more earnings growth downgrades that the market is yet to price in. We’re closer to the bottom but there is still further to go.”

The downward trend has been punctuated by short-term rallies, however, as traders debate whether a gloomy economic outlook is now fully priced in to financial markets.

“A big chunk of the global economy is basically contracting,” said Luca Paolini, chief strategist at Pictet Asset Management. “But [stock market] valuations are looking more attractive so there’s always people who will say the worst is behind us, let’s buy the market back.”

Data on Monday showed Chinese retail sales dropped 11.1 per cent in April from the same month last year as a wave of stringent coronavirus lockdowns across the country reduced demand. Industrial production, which analysts had expected to rise slightly, fell 2.9 per cent.

Brussels later cut its growth forecasts further for the euro area and lifted its inflation outlook to reflect the economic impact of higher energy costs triggered by Russia’s invasion of Ukraine.

Meanwhile, Lloyd Blankfein, senior chair of Goldman Sachs, told CBS News on Sunday that there was a “very, very high risk” of a US recession. The world’s largest economy contracted unexpectedly in the first quarter of the year. Consumer price inflation is also running close to a four-decade high.

The US Federal Reserve earlier this month raised its main borrowing cost by 0.5 percentage points, while chair Jay Powell said moves of the same size “should be on the table at the next couple of meetings”.

European Central Bank president Christine Lagarde also signalled last week that the institution was ready to drop its long-held policy of keeping interest rates in the currency bloc below zero.

Europe’s Stoxx 600 share index slipped 0.2 per cent lower on Monday, while London’s FTSE 100 edged 0.2 per cent higher.

In Asia, mainland China’s CSI 300 share index fell 0.8 per cent, while Hong Kong’s Hang Seng added 0.3 per cent and Tokyo’s Topix lost 0.1 per cent.

Brent crude oil dipped 0.5 per cent to $111 a barrel.

The yield on the 10-year US Treasury note, which moves inversely to the price of the benchmark debt security, fell 0.03 percentage points to 2.9 per cent.

Original Source Link


Please enter your comment!
Please enter your name here

Latest News

Massive Protest Rocks The Supreme Court For Second Day After Roe Is Overturned

The protesters aren’t going away, and their numbers seem to be growing on the second day after the...

What is non-exercise activity thermogenesis (NEAT)?

It can be a secret weapon for those with weight loss goals, but for many people the answer...

'I decided to build my own camp': 14,000-SF Poconos home with indoor Olympic-length pool lists for $3.5M

Located on 73 acres, the estate also includes a home theater, outdoor kitchen and a sprawling gym. ...

Deadly Earthquake Devastates Afghans Already Reeling From Poverty

GAYAN, Afghanistan (AP) — Afghanistan’s deadly earthquake this week struck one of the poorest corners of a country...

The Umbrella Academy Season 3 Ending Explained: A Kugel-What-Now?

Basically, yes ... we think. The Hotel, it turns out, is protected by an otherworldly defender: a samurai...

World Health Organization says monkeypox is not a global health emergency right now

The World Health Organization on Saturday said the rapid spread of monkeypox across dozens of nations does not...

Must Read

Here are 2 popular crypto scams—and how to avoid them

Scams are not a recent phenomenon, with stories about...

AOC Blasts Republican Hypocrites After Roe Is Overturned

Rep. Alexandria Ocasio-Cortez (D-NY) called out the hypocrisy...
- Advertisement -

You might also likeRELATED
Recommended to you