NEW YORK: A gauge of global stocks edged higher on Monday after economic data from China came in as expected, although stocks on Wall Street slipped as financials showed some weakness in the wake of Citigroup’s earnings report. China’s second-quarter annual GDP growth rate fell to a 27-year low of 6.2%, as expected, while June reports on industrial production, retail sales and urban investment were above forecasts.
On Wall Street, major indexes were near flat, with the S&P kept in check after its first close above the 3,000 mark by a 0.6% decline in financial stocks in the wake of Citigroup earnings. The bank’s shares were last up 0.13% after losing as much as 2.4%.
We had Citigroup earnings, which were good and the stock is up modestly, the rest of the other financials are a bit down today, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. This is primarily earnings watch and earnings anticipation. Generally, what I see as you head into right before earnings and the early part of earnings is the market tends to be flat. The Dow Jones Industrial Average fell 12.05 points, or 0.04%, to 27,319.98, the S&P 500 lost 1.34 points, or 0.04%, to 3,012.43 and the Nasdaq Composite added 9.05 points, or 0.11%, to 8,253.20.
Equities have rallied since a sell-off in May as investors have grown more confident the US Federal Reserve will cut its key interest rate by at least a quarter point late this month. Improving economic data, however, could complicate the Fed’s ability to lower rates. Corporate earnings are also moving into focus with a slew of banks scheduled to follow Citi this week, including JP Morgan, Goldman Sachs and Wells Fargo. According to Refinitiv data, S&P 500 companies’ earnings are expected to show a decline of 0.3 percent for the quarter.
Other major companies scheduled to post results this week include Netflix, Microsoft and Honeywell. The pan-European STOXX 600 index rose 0.23% and MSCI’s gauge of stocks across the globe gained 0.10%. Germany’s Economy Ministry said it expected the economy to turn in a weak second quarter and said significant risks remain, buoying expectations the European Central Bank would take further easing measures at its meeting next week. Germany’s DAX closed up 0.52%.
Later in the week, US retail sales and industrial production data will provide clues about the health of the world’s largest economy. The Federal Reserve will release its Beige Book on Wednesday and investors will look to it for insight on how trade tensions are affecting the business outlook. US Treasury yields were lower with investors eyeing the retail sales data due on Tuesday. Benchmark 10-year notes last rose 4/32 in price to yield 2.0939%, from 2.106% late on Thursday.