Wall Street muted as traders digest Chinese inflation, eye U.S. data
By Lawrence Delevingne and Nell Mackenzie
(Reuters) -Wall Street stocks and oil prices were muted on Monday, as investors digested Chinese data that heightened worries of an economic slowdown and looked ahead to a key U.S. inflation report.
The Dow Jones Industrial Average rose about 0.4%, while the S&P 500 and Nasdaq Composite were both little changed. The pan-European STOXX 600 index rose 0.13%.
Chinese consumer price figures fell in June, leaving them almost unchanged from a year earlier, while producer prices slid deeper into negative territory.
The weakness implies scope for further monetary policy easing, but also underlines the challenge Beijing faces in reflating its economy and avoiding a deflationary spiral.
«China is just a symptom. We see weaker growth around the world because of the effect of higher interest rates. China is exposed to that because of their export sensitivity,» said Matthias Scheiber, global head of multi-asset portfolio management at Allspring Global Investments in London.
«The challenge going forward will be on equity valuations. If there is no improvement in earnings, it will be hard for equities to continue to rally,» added Scheiber.
Citigroup (NYSE:C) on Monday downgraded U.S. stocks in anticipation of a pullback in growth equities and a recession in the fourth quarter of the year, while betting on beaten-down counterparts in Europe with an upgrade.
The brokerage cut its rating on U.S. stocks to «neutral» from «overweight» after a strong rally in the first half of the year. It warned that growth stocks were set for a pullback as the «euphoria» around artificial intelligence enters a more «digestive» phase.
The earnings season starts this week with JPMorgan (NYSE:JPM), Citi, Wells
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