(News Bulletin 247) – Wall Street is expected to fall on Monday morning, a
series of Chinese indicators below expectations having revived concerns about the state of health of the global economy.

Half an hour before the open, index futures suggest a drop of 0.2% for the Dow Jones, 0.1% for the S&P 500 and relative stability for the Nasdaq.

The general climate was weighed down by the announcement, overnight, of growth of only 6.3% in China’s gross domestic product (GDP) year-on-year in the second quarter.

By way of comparison, economists were hoping for much more vigorous growth, around 7.3% over one year.

Still on the macroeconomic level, Chinese industrial production – an important economic indicator reflecting the country’s activity – only increased by 3.8% in the first half.

“The pace of recovery linked to the reopening of the economy has therefore slowed more than what was expected at the start of the year”, underline the economists of Commerzbank.

For the UBS teams, the implementation of new stimulus measures and the warming of political relations with Washington could however allow an upturn in the second half of the year.

In the United States, the Empire State index, which measures the manufacturing sector in the New York region, saw its expansion slow down markedly in June, settling at +1.1 against +6.6 in June, but the consensus awaited him on negative ground.

After long weeks spent following the evolution of disinflation and Fed policy, Wall Street will mainly return this week to what it knows best: corporate results.

Among the heavyweights due to announce their quarterly performance this week are – among others – Morgan Stanley, Goldman Sachs, Tesla, Netflix and Johnson & Johnson.

On the bond market, the yields of government bonds vary little, that of 10-year Treasuries tending barely beyond 1.81% after ending the past week in the 1.80% zone.

On the currency side, Wall Street’s caution is illustrated by the dollar’s decline against the euro, which rose to nearly 1.1230 against the greenback.

Benchmark oil contracts are heading lower again as slowing Chinese growth stokes fears for demand, leading US light crude (WTI) to drop 1.1% to $74.5.

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