Even the Most Eye-Popping Economic Data Is a Skip for Markets

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Investors continued to shrug at economic data surprises this week, including in Australia and China, amid distortions caused by the pandemic.

Markets are seemingly inured to occasionally eye-popping gyrations in everything from economic growth to jobs to retail sales data, in the wake of months of social distancing and periodic lockdowns.

Even the Most Eye-Popping Economic Data Is a Skip for Markets

The CSI 300 -- China’s equity benchmark -- drifted briefly lower before rebounding back to a gain of 1.5% by the afternoon, while the yuan was little-changed Friday, after data showed a less-than-expected 4.8% growth in industrial output in July, and an unexpected 1.1% contraction in retail sales.

On Thursday, the Australian dollar rose 0.1% against the greenback while the S&P/ASX 200 dropped 0.7% despite a strong July jobs report. The data showed employment increasing by 114,700 versus expectations of 30,000, and that the unemployment rate was lower than projected at 7.5%.

Strategists are also digging under the hood of recent reports such as U.S. jobless claims and inflation data, warning that headline numbers may not give the whole picture. For instance, John Mauldin, president at investment advisory firm Mauldin Solutions LLC, has previously said that Covid-19 wrought “havoc” on employment data.

The fog of figures makes it even harder to gauge the outlook for markets, after a rally in asset classes such as stocks, gold, bonds -- even Bitcoin -- from March’s pandemic-induced lows.

©2020 Bloomberg L.P.

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