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European and US stock markets mostly pushed higher on Tuesday as investors digested data showing a mixed picture for the US economy and a fresh round of corporate results. bulletin news
Investors were also still digesting this week’s Chinese second-quarter growth data that fell short of forecasts with the tough job officials face to get the country’s post-Covid recovery back on track continuing to weigh on markets.
European stocks finished the day higher after tepid trading in the morning while Wall Street’s main indices were mixed in late morning trading.
Stocks have been buoyant since data last week showed US inflation had come down quicker than expected in June, stoking hopes the Federal Reserve was close to the end of its interest rate hiking cycle.
Data out Tuesday showed that US retail sales edged 0.2 percent higher last month, well below the analyst consensus of an increase of 0.6 percent.
Craig Erlam, senior market analyst at trading platform OANDA, said an upward revision of May figures helped balance out the June underperformance.
“I’m not convinced today’s data really changes things as far as the consumer or economy is concerned, all things considered, nor has it really changed anything on interest rate expectations, with markets almost fully pricing in a hike next week and probably no more after that,” he said.
Meanwhile, US industrial output fell by a more-than-expected 0.5 percent last month.
The data is consistent with the narrative of a “soft landing” of the US economy where the Fed’s high interest rates slow growth but avoid triggering a recession, while brining down inflation.
Investors are also keeping watch this week on corporate earnings.
Bank of America, the second largest US bank by assets, reported an 11 percent increase in revenue to $25.2 billion, with net profit climbing 19 percent to $7.4 billion, beating analyst expectations.
But Morgan Stanley saw profits slide 14 percent.
“We are done with the majority of the big banks and the overall takeaway is that they did ok despite a weakening economy and all the turmoil that stemmed from the regional banking crisis last quarter,” said OANDA analyst Edward Moya.
“Wall Street knows this earnings season will have everyone calling this a challenging market environment, but optimism might remain that a resilient US economy should translate into decent spending despite all the headwinds,” he added.
In Asia trading was still dominated by Monday’s disappointing Chinese GDP growth figures.
“Traders are concerned about economic numbers from China and… remain on the edge,” noted Zaye Capital Markets analyst Naeem Aslam.
And while there is expectation that more stimulus measures are in the pipeline, other analysts warned that leaders were limited in how far they could go.
The figures came after last week’s reports showing inflation had flatlined, suggesting China was on the brink of a period of painful deflation, while exports plunged for a second straight month.
Hong Kong led Asian losses on Tuesday, shedding more than two percent following a five-day rally, as it reopened a day after being shut because of a severe storm.
Shanghai, Sydney, Seoul, Singapore, Manila, Jakarta, Wellington and Taipei also dropped, though Tokyo, Mumbai and Bangkok edged higher.
Key figures around 1530 GMT
New York – Dow: UP 1.0 percent at 34,937.22 points
London – FTSE 100: UP 0.6 percent at 7,453.69 (close)
Paris – CAC 40: UP 0.4 percent at 7,319.18 (close)
Frankfurt – DAX: UP 0.4 percent at 16,125.49 (close)
EURO STOXX 50: UP 0.3 percent at 4,369.73 (close)
Tokyo – Nikkei 225: UP 0.3 percent at 32,493.89 (close)
Hong Kong – Hang Seng Index: DOWN 2.1 percent at 19,015.72 (close)
Shanghai – Composite: DOWN 0.4 percent at 3,197.82 (close)
Euro/dollar: DOWN at $1.1229 from $1.1236 on Monday
Dollar/yen: UP at 138.82 yen from 138.71 yen
Pound/dollar: DOWN at $1.3071 from $1.3073
Euro/pound: DOWN at 85.90 pence from 85.94 pence
West Texas Intermediate: UP 1.7 percent at $75.43 per barrel
Brent North Sea crude: UP 1.5 percent $79.65 per barrel
burs-rl/bp
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