U.S. equity futures fell slightly after data showed China’s economic growth slowed sharply in the third quarter, and investors weighed the risk to global growth from stiffer-than-expected inflation, supply chain issues and increased demand for energy.
Futures for the S&P 500 fell 0.4% on Monday, indicating that the broad market index will drop after posting its best week since July last week. Contracts for the tech-focused Nasdaq-100 fell 0.4% and futures for the Dow Jones Industrial Average edged down 0.3%.
Data released on Monday showed that the Chinese economy grew 4.9% in the third quarter from a year earlier, a slowdown from the 7.9% rate in the second quarter. Power shortages and supply chain problems have added to the impact of Beijing’s efforts to curb its real estate and tech sectors.
The slower growth data is “a reminder that China is expected to lose some of its momentum, but also how these global issues like the energy crisis and supply chain issues will spill over into global growth,” Edward said. Park, Director of Investments in the United Kingdom. Brooks Macdonald investment firm. “There is just a bit of rebasing in expectations for China and the rest of the world.”
The main Asian indices closed slightly lower. The Chinese Shanghai Composite index lost 0.1%, while the CSI 300 index of large stocks listed in Shanghai or Shenzhen closed down 1.2%. The Hong Kong Hang Seng appreciated at the end of the session to close up 0.3%.
“We are in a mid-cycle slowdown,” said David Chao, global markets strategist for Asia-Pacific ex-Japan at Invesco, adding that Chinese markets face continued uncertainty and volatility in the near term. Still, he added: “Keep in mind that the government has many tools to move the economy forward.”
In pre-market trading, shares of the Zillow Group were down 6.4% after Bloomberg reported that the company’s automatic turnaround activity temporarily stopped pursuing acquisitions of new homes.
Futures contracts on Brent crude, the benchmark in global oil markets, rose 0.7% to $ 85.49 per barrel. Last week, Brent crude recorded its eighth consecutive week of gains, its longest such streak in a 10-week stretch until April 30, 1999.
A good start to the earnings season has raised hopes that companies can overcome the growing challenges.
Bitcoin, the world’s largest cryptocurrency by market value, gained 2.8% from its 5 p.m. ET level on Sunday to trade at $ 61,127.49. The first exchange-traded fund in the United States is expected to start trading on Tuesday.
In bond markets, the yield on the 10-year Treasury bill climbed to 1.611% on Monday, from 1.574% on Friday. Yields increase when prices fall.
Overseas, the pan-continental Stoxx Europe 600 fell 0.4%, with losses driven by the travel and leisure sector.
The yield on the UK benchmark 10-year gilt rose to 1.157% on Monday from 1.093% on Friday, according to Tradeweb.,
after Bank of England Governor Andrew Bailey said over the weekend that the central bank “should act” to curb price pressures, despite the fact that the rise in inflation is likely temporary. Yields on other European bonds also rose, with the German 10-year Bund yield hitting minus 0.120% on Monday from minus 0.176% on Friday.
U.S. industrial production data for September, due at 9:15 a.m. ET, is expected to post a seventh consecutive monthly increase. The measurement of production in factories, mines and utilities has been supported by strong consumer demand for manufactured goods, although supply chain disruptions and a shortage of semiconductors could reduce production. automobile and bring down the numbers.
—Frances Yoon contributed to this article.Write to Caitlin Ostroff at [email protected]
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