Five Things You Need to Know to Start Your Day
China growth data is coming up, markets are set for a cautious start to the week and U.S. earnings season kicks off. Here are some of the things people in markets are talking about today.
China Data Dump
The release of second-quarter Chinese GDP data and June activity data will be the key scheduled event for markets on Monday. Consensus is for growth to moderate to 6.2% from 6.4% in the first quarter — the slowest pace in three decades. Bloomberg Economics says any weakening will increase urgency for policy makers to step up fiscal and monetary support.
Hong Kong Protests Again
Hong Kong demonstrators gathered for another weekend of protests with a growing list of grievances. They’re maintaining pressure on Chief Executive Carrie Lam who is reported to have offered her resignation several times in recent weeks to her political masters in Beijing. Protesters clashed with police at a shopping mall late Sunday in the district of Sha Tin, a popular destination for locals and visitors from mainland China, with television footage showing injuries on both sides. Rally organizers said 110,000 people took part in a demonstration in the area earlier, Radio Television Hong Kong reported, while police estimated the crowd at 28,000.
Asian stocks were set to start the week with a cautious tone as investors turned their attention to upcoming data on Chinese economic growth amid expectations for further policy support. Futures in Hong Kong and Australia were lower late Friday despite the S&P 500 Index climbing to a fresh all-time high. Japan is closed for a holiday so equities won’t trade and Treasuries will be shut until the London open. The yield on 10-year Treasuries ended last week at 2.12%, near to a one-month high.
Trump Called Racist
President Donald Trump was accused of being racist and divisive by many Democrats on Sunday after suggesting that four progressive female Democratic lawmakers, led by Alexandria Ocasio-Cortez of New York, should return to the “broken and crime infested places from which they came.” Three of the four women Trump was apparently referencing were born in the U.S.; none is white. Trump said the lawmakers “originally came from countries whose governments are a complete and total catastrophe” and should go back and help fix the countries and “then come back and show us how it is done.”
Earning Season Begins
The big U.S. banks get the quarterly reporting season going this week. With an interest rate cut looking likely this month, some banks may preemptively trim their outlook for net interest income, Bloomberg Intelligence said. Citigroup is up first on Monday, then JPMorgan and Goldman Sachs follow on Tuesday. Bank of America, which should see support from solid credit growth and controlled costs, reports Wednesday. Morgan Stanley is Thursday. And for non-financial firms, any effects of the trade war will be closely watched at Taiwan Semiconductor, which reports second-quarter results Thursday. Other tech companies on deck include Netflix, IBM and Microsoft. Finnair and United Airlines may provide color around the impact of the ongoing Boeing 737 Max shutdown.
What We’ve Been Reading
This is what's caught our eye over the weekend:
- China’s stock market is flashing too many warning signs.
- These are the countries most at risk of housing bubbles.
- Gilead is paying $5.1 billion for Belgian biotech to deepen inflammatory disease research.
- The party in Saudi Arabian markets is starting to dwindle.
- India has called off its mission to the moon.
- Selfies by toxic Siberian reservoir forces firm to hire 24-hour guard.
- Djokovic beats Federer in historic Wimbledon final.
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