25 April 2019

China Economic News Boosts Markets

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U.S. stock futures were modestly higher ahead of the open as investors received news that the economic status in China met analysts’ expectations. The news out of China allayed fears that the economic slowdown was intensifying.

While the latest data show China's second quarter GDP grew at 7.5 percent over the previous year, which was slower pace over the previous year, the performance matched the government's target and the consensus estimate from private analysts.

Markets reacted favorably to the news that the slowdown was not greater than expected. In contrast, China has averaged growth of around 10% a year over the past thirty years.

The U.S. government is scheduled to release data on June retail sales on Monday which may have mixed news. If retails sales show a significant rise, there may be fears that the Fed may slow down its bond purchase program sooner. The bond purchase program has been helping the equity markets as of late.

U.S. stocks closed higher Friday with modest gains that were put Dow and S&P 500 in new record closings and the Nasdaq was at its highest level in over a ten years.

Other News: 

Bank earnings will remain in focus Monday, with Citigroup (C) set to report its quarterly results before the opening bell.

Boeing's (BA) stock rebounded and edged up 1% after British investigators said that an Ethiopian Airlines 787 Dreamliner fire at London Heathrow Airport last Friday was not caused by its batteries, which have created problems in the past.

Major European markets gained less than 0.5% in morning trading, while the main Chinese markets ended with gains. The Shanghai Composite index and the Hang Seng index popped up by 1% and 0.1%, respectively. In Japan, the Tokyo Stock Exchange was closed for a holiday.
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