China’s GDP grew a disappointing 4.9% in the third quarter
Wall Street stocks climbed on Friday to finish the week on a positive note due to better-than-expected third-quarter earnings reports and strong economic data. As such, Goldman Sachs’ results came in much higher than expected, with the bank’s stocks rallying nearly 4% ahead of the weekend. JPMorgan, Bank of America, and Morgan Stanley topped estimates as well. Furthermore, US retail sales posted a surprise increase last month, rising 0.7% versus a 0.2% decline expected. Against this backdrop, the S&P 500 rose 0.75%, the Dow Jones Industrial Average added 1.09% and the Nasdaq Composite gained 0.5%.
On Monday, however, investor sentiment turned sour. The risk-on tone has abated today after fresh data showed that China’s GDP grew a disappointing 4.9% in the third quarter versus a rise of 5.1% expected. Furthermore, industrial production rose by 3.1% last month, below the 4.5% growth expected. As such, the Shanghai Composite index lost 0.4%, while the Hang Seng in Hong Kong declined 0.4%. Tokyo’s Nikkei 225 index edged 0.15% lower and the Kospi in Seoul was down 0.28%. Bucking the trend, the S&P/ASX 200 in Sydney rose 0.26%.
In Europe, equities opened marginally lower on Monday, with the pan-European Stoxx 600 sliding 0.5% in early trade. European Central Bank Governing Council member Visco said today that market expectations are not that consistent with the ECB‘s guidance. He also added that the central bank has not discussed raising the limit on international bond-buying. U.S. stock index futures were mostly unchanged in early pre-market trading.
Meanwhile, the dollar regained upside momentum to climb to two-day highs today. As risk demand has abated, the greenback managed to come off local lows registered during the second half of last week. As such, EURUSD dipped back below the 1.1600 figure, staying under the descending 20-DMA for over a month already. Later today, fresh economic data out of the US could set a fresh direction for the pair.