Asian equity markets were mostly higher on Monday despite China’s consumer and factory data missing expectations
US stocks finished higher on Friday to register the fourth straight positive week for the S&P 500 as investors continued to cheer signs that inflation may be peaking. Also on the positive side, the University of Michigan’s preliminary August reading on the overall index on consumer sentiment came in at 55.1, up from 51.5 in the prior month, ticking further up from a record low. The Dow Jones Industrial Average added 1.27%, the S&P 500 gained 1.73%, and the Nasdaq Composite surged 2.09%. For the week, the S&P 500 rose 3.26%, the Dow was up 2.92%, while the Nasdaq Composite moved higher by 3.08%.
Asian equity markets were mostly higher on Monday despite China’s consumer and factory data missing expectations in July. Retail sales grew by 2.7% in July from a year ago, below the expected growth of 5%. Industrial production rose by 3.8%, also missing expectations for 4.6% growth. The Shanghai Composite index finished marginally below the flat-line while Hong Kong’s Hang Seng shed nearly 0.5%. Meanwhile, the Nikkei 225 in Tokyo gained more than 1% after the data showed that the Japanese GDP expanded an annualized 2.2% in the second quarter, accelerating from a revised 0.1% increase in January-March.
In Europe, stocks opened mixed and little changed on Monday, with investors staying cautious as the risk of a Eurozone recession has reached the highest level since November 2020. As Bloomberg survey showed, the probability of output shrinking for two straight quarters has risen to 60% from 45% in a previous survey. On the data front, Germany’s July wholesale price index fell 0.4% vs +0.1% m/m in the previous month. US stock index futures are down between 0.2% and 0.3%.
In currencies, the US dollar looks steady at the start of the week amid a cautious tone among investors. The USD index is now targeting the 106.00 mark as traders shift focus towards the FOMC meeting minutes due on Wednesday. Should the central bank continue to express a hawkish tone despite a slower inflation, the greenback may receive a fresh boost to stage a rally across the market later in the week.
