SYDNEY : Asian shares got off to a subdued start on Monday as markets braced for a raft of Chinese economic data that could well underwhelm, while earnings season picks up steam with Tesla on the docket.
The Chinese economy is forecast to have grown just 0.5 per cent in the second quarter, though the annual pace will be flattered by base effects at a predicted 7.3 per cent.
Retail sales, industrial output and urban investment are all expected to show slowing growth, which is why markets are counting on Beijing to unveil more stimulus measures soon.
Figures out over the weekend showed China’s new home prices were unchanged in June, the weakest result this year.The risk of even softer
outcomes kept MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.2 per cent, though that follows a 5.6 per cent rally last week.
Japan’s Nikkei was closed for a holiday, though futures were trading near flat.S&P 500 futures and Nasdaq futures were both down 0.2 per cent, but that followed hefty gains last week.
Tesla is the first of the big tech
names to report this week, while a busy earnings schedule includes Bank of America, Morgan Stanley, Goldman Sachs and Netflix.
Data on U.S. retail sales are expected to show a rise of 0.3 per cent ex-autos, continuing the slower trend but solid enough to fit into the market’s favoured soft-landing theme.
“We continue to look for a modest contraction to take hold toward the end of the year, but the path to a non-recessionary disinflation is starting to look more plausible,” said Michael Feroli, an economist at JPMorgan.
“We expect Fed officials cheered the latest inflation developments, but declaring victory with sub-4 per cent unemployment, and over 4 per cent core inflation, would be reckless.”
Source: Reuters
