Marketmind: Bland China data leaves market hungry for stimulus
A look at the day ahead in European and global markets from Wayne Cole
It could have been worse, is about the best that can be said of China's data dump today. The Q2 GDP number of +0.8% q/q just pipped forecasts, but y/y undershot at 6.3% suggesting revisions somewhere to the past.
Industrial output in June beat by rising 4.4% on year, but retail sales missed at 3.1% and property sales suffered the largest monthly drop this year, so making for a rather mixed bag.
The market reaction was disgruntled with Chinese shares down and the yuan easing. Investors' favourite liquid China proxy, the Aussie dollar, was modestly under water as analysts suspect Beijing will allow the yuan to keep depreciating as one form of indirect stimulus.
The data underlined the need for much more serious fiscal spending but Beijing seems in no hurry to satiate market wishes this time. The central bank left one-year rates unchanged on Monday, and analysts seem resigned to wait for a Politburo meeting later this month for fresh steps.
Earnings season is well underway and Tesla (NASDAQ:TSLA) is the first of the tech giants to report on Wednesday, with much riding on whether it can meet high expectations.
BofA expects it and the six other tech behemoths to boast earnings growth of an average of 19% over the next 12 months, more than double the 8% estimated for the rest of the S&P 500.
Worth noting that the phenomenal rise in the seven's market capitalisation will prompt a re-weighting of the Nasdaq on July 24, which will see their weighting fall to 44% of the index from 56%. Apple (NASDAQ:AAPL)'s weighting will drop by around 4ppt to 12% and Microsoft (NASDAQ:MSFT) the same to 10%.
Goldman Sachs (NYSE:GS) says passive funds that track NDX will
Read more on investing.com
