Asia, Europe, and US markets Closing Report | Monday, 8, 2022:



China shares climb as official data showed economic growth topped 8% last year

Saheli Roy Choudhury

SINGAPORE — China shares climbed Monday in a mixed trading session across the Asia-Pacific as official data showed the world's second largest economy grew faster than expected between October and December.

The Shanghai composite added 0.58% to 3,541.67 while the Shenzhen component gained 1.51% to 14,363.57.

Numbers from China's National Bureau of Statistics showed the Chinese economy grew by 8.1% in 2021, slightly below the market's expectation for around 8.4% growth for the year. In the fourth quarter, China's GDP rose 4% from a year ago, topping a Reuters poll that predicted a 3.6% increase.

Industrial production also rose and beat expectations, but retail sales had a more muted growth.

China requires more policy support

Economists were expecting Monday's data dump to underline a slowdown in growth, in part due to factors like China's strict measures to contain the omicron Covid variant as well as problems in its property sector and sluggish consumption.

"Retail sales was a big miss," Johanna Chua, head of Asia economics and strategy at Citi Global Markets Asia, told CNBC's "Street Signs Asia" on Monday. "This is one area where I think it really requires a little bit more policy support."

China's central bank also cut the borrowing costs of its medium-term loans for the first time since April 2020, Reuters reported. The People's Bank of China said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility loans to some financial institutions by 10 basis points to 2.85%, the news agency reported.

Citi's Chua said while the timing of the reduction was in line with the investment bank's expectations, it was still a larger than expected cut. "Which really suggests that, I think, policymakers now are much more concerned about growth, and we should see concerted action going forward," she added.

Chua also said she does not expect to see China abandon its zero-Covid policy anytime soon.

Last week, U.S. investment bank Goldman Sachs slashed its 2022 forecast for China economic growth from 4.8% to 4.3%.

Rest of APAC mixed

The rest of Asia-Pacific markets traded mixed.

The Nikkei 225 in Japan rose 0.74% to 28,333.52 while the Topix index added 0.46% to 1,986.71.

Australian shares also eked out gains as the ASX 200 added 0.32% to 7,417.30. The heavily-weighted financials subindex gained 0.55% and the energy sector was up 1.39%.

South Korean shares, however, faltered as the Kospi slipped 1.09% to 2,890.1 and the Kosdaq fell 1.39% to 957.90. Hong Kong shares also struggled as the Hang Seng index declined 0.68% to 24,218.03.

The session in Asia followed a mixed finish in the U.S. last Friday, where Wall Street notched a second straight negative week to start the year.

Stock picks and investing trends from CNBC Pro:

"Markets reacted defensively to disappointing US economic data for December as retail sales fell sharply and manufacturing production declined, hit by a triple whammy of high inflation, ongoing supply shortages and Omicron," ANZ Research analysts wrote in a Monday morning note.

"We expect the Fed will have to revise up its inflation forecasts and interest rate guidance for coming months at next week's meeting," they added.

U.S. markets are closed Monday for Martin Luther King Jr. Day.

Currencies and oil

In the currency market, the U.S. dollar slipped 0.07% to 95.099 in the afternoon against a basket of its peers, after last week climbing from levels near 94.87.

The dollar could "remain heavy this week and head down towards 94.11," said analysts from the Commonwealth Bank of Australia in a Monday note.

They noted that there are no policy-relevant economic data releases this week or any scheduled speeches from Fed officials that could influence the market pricing for the U.S. central bank's rate hikes.

"We expect interest rate markets to continue to favour a March lift‑off to the Funds rate," the CBA analysts said, adding, "At the same time, the view that omicron is unlikely to derail the global economic recovery is a weight on the counter‑cyclical USD."

Elsewhere, the Japanese yen changed hands at 114.34, strengthening from levels near 115.5 in the previous week. The Australian dollar traded up 0.15% at $0.7217.

Oil prices advanced on Monday during Asian trading hours. U.S. crude added 0.39% to $84.15 a barrel while global benchmark Brent rose 0.05% to $86.10.

ANZ analysts said the release of economic data in China are set to affect commodity markets early in the week, but geopolitical tensions "and subsequent supply concerns will remain an important driver of sentiment."

CNBC's Evelyn Cheng contributed to this report.





European stocks close higher as traders assess earnings, economic data

Elliot Smith

LONDON — European markets closed higher on Monday as investors continued to monitor corporate earnings and key economic data points, assessing the risk of recession.

"In the same way that Erwin Schrödinger's cat was both dead and alive at the same time, the global economy may be both in a recession and not — at least not yet."

James Pomeroy

Global Economist, HSBC

On the data front in Europe, August's Sentix economic sentiment index for the euro zone rose fractionally from the previous month, but still pointed to a high likelihood of recession across the 19-member common currency bloc.

"In the same way that Erwin Schrödinger's cat was both dead and alive at the same time, the global economy may be both in a recession and not — at least not yet," said HSBC Global Economist James Pomeroy.

"Over the past month, the confusing signals haven't gotten any clearer, with a second quarterly contraction in US GDP being at odds with firmer monthly data, upside surprises to GDP data in Europe and a number of releases suggesting that consumers keep spending despite their downbeat outlook."

Corporate earnings continued to drive individual share price movement in Europe, with Siemens Energy, Porsche and BioNTech among the companies reporting before the bell on Monday.

British financial services company Hargreaves Lansdown gained more than 7% to lead the Stoxx 600 after Deutsche Bank raised its price target for the stock.

At the bottom of the index, British media company Future fell 5%.




Stock futures rise slightly as Wall Street awaits more earnings, inflation data

Sarah Min

Traders on the floor of the NYSE, August 1, 2022.

Source: NYSE

U.S. stock futures rose slightly on Monday night after Wall Street weighed the outlook for chip stocks, and looked ahead to more earnings results and inflation data that will determine the pace of future interest rate hikes.

Dow Jones Industrial Average futures rose by 33 points, or 0.1%. S&P 500 and Nasdaq 100 futures climbed 0.11% and 0.11%, respectively.

Novavax slumped 32% in extended trading after slashing full-year revenue guidance because of poor demand for its Covid vaccines.

Upstart declined 10% in extended trading after the consumer lending company reported second quarter results that missed both profit and revenue expectations.

During Monday's regular trading, the S&P 500 slipped 0.12%. The Nasdaq Composite ticked down 0.10%. The Dow gained 29.07 points to close 0.09% higher.

Traders deliberated the implications of weaker-than-expected revenue from Nvidia on other semiconductor companies. They also considered whether the major averages will once again challenge June lows after their recent gains; the S&P 500 is coming off its third consecutive positive week.

"I think a retest is likely and investors need to be careful about buying in here," Morgan Stanley Wealth Management's Jim Lacamp said Monday on CNBC's "Closing Bell."

"You should use a rally like this to sell some stuff that you're trying to get rid of — you know, you don't want the cheese anymore, you want out of the trap."

On the economic front, investors are awaiting the latest reading of the July consumer price index, due Wednesday, to find some clarity on the path of interest rate hikes from the Federal Reserve as it works to stamp out inflation, or at least slow it.

Investors also await another batch of earnings on Tuesday. Workhorse, Capri Holdings and Ralph Lauren are set to report quarterly results before the bell. Coinbase, Spirit Airlines, Roblox, Sweetgreen and EVgo will report after the market closes.

Novavax shares plunge

Shares of Novavax plummeted 32% in after hours trading after the biotech company cut its full-year revenue guidance roughly in half because of poor demand for its Covid vaccines.

Novavax said it expects to generate $2 billion to $2.3 billion in revenue in 2022, compared to previous guidance of $4 billion to $5 billion in revenue for the year.

— Sarah Min

Stock futures tick higher after Monday's mixed session

Stock futures rose slightly Monday night after the S&P 500 and Nasdaq posted slight losses in regular trading.

Futures tied to the Dow Jones Industrial Average traded 40 points higher, or 0.1%. S&P 500 and Nasdaq 100 futures advanced 0.1% each.

Fred Imbert

Better-than-expected earnings results

The major averages have rallied this earnings season on the back of better-than-expected results. Of the 439 companies that have reported results through Monday, about 75.3% have beat expectations, according to FactSet.

— Sarah Min



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