China's property sector woes, Goldman Sachs' Fed outlook - what's moving markets
Investing.com — Fears over China's debt-laden property sector mount after key player Country Garden halts trading on some of its mainland bonds. Elsewhere, economists at Goldman Sachs predict when the Federal Reserve will begin cutting interest rates after an aggressive policy tightening campaign, while investors look ahead to results from large big-box brands and retail sales figures for July.
1. China's property sector woes deepen
Chinese residential real estate giant Country Garden (HK:2007) suspended trading in more than ten of its onshore bonds on Monday, sparking a sell-off in the company's Hong Kong-listed shares as well as other stocks exposed to the country's ailing property sector.
Media in China reported that Country Garden, once China's largest developer by sales, is also seeking a potential debt structuring after it warned of a sharp loss in the first half of 2023.
Taken in conjunction with peer Evergrande (HK:3333), which last month reported combined losses of more than $81 billion in 2021 and 2022, the ongoing issues in China's real estate sector now seem to be intensifying. The industry has been severely hit by a liquidity crisis fueled by a slowdown in buyer demand, which has in turn weighed on the post-pandemic recovery of the world's second biggest economy.
Longfor Properties (HK:0960) and Seazen Group (HK:1030), two other Chinese real estate firms currently considered to be financially healthy, saw their shares and bonds dip on Monday.
China's government has chosen not to step in to bail out the struggling property businesses yet, but the issues at Country Garden, Evergrande, and elsewhere have spurred on calls for Beijing to provide more support.
2. Goldman Sachs' Fed outlook
The Federal Reserve is
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