Last Update: July 11, 2023, 01:31 AM IST
New York, United States (USA)
A street sign for Wall Street is seen outside the New York Stock Exchange (NYSE) in New York City, New York, US, July 19, 2021. (Reuters/File photo)
Wall Street shares edged lower as investors analyzed Chinese data and hoped for a US inflation report. Dollar falls, supply cuts lower oil prices
Wall Street stocks were muted on Monday, while oil prices and the dollar declined as investors digested Chinese data that raised concerns of an economic slowdown and waited for a key US inflation report.
The Dow Jones Industrial Average rose about 0.5%, while both the S&P 500 and Nasdaq Composite were little changed. European shares edged higher on Monday, led by gains in the travel and leisure sector, with the pan-European STOXX 600 index rising 0.18%.
Chinese consumer price data fell in June, leaving them virtually unchanged from a year earlier, while producer prices slipped further into negative territory. The weakness shows room for further monetary policy easing, but it also underscores the challenge Beijing faces in reviving its economy and avoiding a deflationary spiral.
“China is just a symptom. We are seeing weaker growth around the world due to the impact of higher interest rates. “China is exposed because of its export sensitivity,” said Mathias Scheiber, global head of multi-asset portfolio management at Allspring Global Investments in London.
Citigroup downgraded US shares on Monday on a decline in growth equities and fears of a recession in the fourth quarter of the year, while betting on beaten-up counterparts in Europe with upgrades.
The brokerage cut its rating on US stocks from “overweight” to “neutral” after a strong rally in the first half of the year. It warned that growth stocks could decline as the “excitement” around artificial intelligence enters a more “digestive” phase. Earnings season starts this week with JPMorgan, Citi, Wells Fargo, State Street and PepsiCo all taking turns.
cpi slowdown
Headline inflation in US consumer prices on Wednesday is expected to come in at 3.1%, the lowest since the beginning of 2021, down from 9.1% a year earlier. Separately, US wholesale inventories were unchanged in May after declining for two consecutive months, suggesting that inventory investment could support economic growth in the second quarter.
“The market is catching on to our view that central banks will be forced to keep policy tightening to curb inflationary pressures,” strategists at BlackRock Investment Institute wrote in a note on Monday. Because markets expect the Fed to raise rates.”
The market still expects the Federal Reserve to raise rates this month, but a weaker CPI may reduce the risk of further increases in September. The futures currently show a near 90% chance of a 25 basis point increase this month to 5.25%-5.5%.
Fed officials have been mostly aggressive in their communication, including Loretta Meister, who said Monday that still-strong levels of underlying inflation pressures are pointing the central bank toward more rate hikes.
Fed Vice President for Supervision Michael Barr said in an appearance on Monday that the central bank is close to reaching an appropriate level for interest rates: “I think we are close.” The market has priced in higher rates in Europe and other countries as well. UK. Canada’s central bank meets this week and the market has a 69% chance of another hike.
Risks of prolonged high global rates have rattled bond markets, where US 10-year yields rose 23 basis points last week, German yields rose 24 basis points and UK yields 26 basis points. Score increased. The yield on 10-year US notes fell 4.8 basis points to 4.000% on Monday.
The US two-year yield last stood at 4.866%, hitting a 16-year high of 5.12% last week. The dollar fell to a near three-week low against the yen on Monday as investors kept raising prices on hopes that the Federal Reserve is nearing the end of its tightening cycle.
The dollar index dropped 0.25%, while the euro was up 0.23%, and the pound was flat. In commodity markets, gold was little changed after marginal gains in the previous week.
Oil prices fell on Monday following weak economic data from top consumers the US and China, although hopes of crude supply cuts from Saudi Arabia and Russia limited losses. US crude was down 1.04% on the day at $73.09 a barrel and Brent was down 0.93% at $77.74.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
