China's industrial profits extend slump into seventh month
Profits at China's industrial firms fell 6.7% in July, marking the seventh consecutive month of decline, as weak demand continues to hinder the country's post-pandemic recovery.
/cloudfront-us-east-2.images.arcpublishing.com/reuters/R5ZBHTHQ25M2ZPZBWLCF3LIJCE.jpg)
Topics
Posted 8/27/2023, 4:59:00 AM
reuters.com
Relevant topic timeline:
Japan's exports fell in July for the first time in nearly 2-1/2 years, driven by weak demand for light oil and chip-making equipment and raising concerns about a global recession as the demand in key markets such as China weakens.
Chinese shares dropped as banks in the country cut interest rates less than expected, with the benchmark one-year loan prime rate being lowered by 0.1 percentage point to 3.45%.
The Dow Jones Industrial Average fell after a surprise drop in initial jobless claims, while tech stocks, such as Nvidia, saw gains due to strong earnings results.
Shares of Walt Disney fell 3.9% to their lowest level in almost nine years as investors anticipate further price drops and scrutinize the company's turnaround plan after the announcement of price hikes, more ads, and cost cuts to boost the business.
Sinopec's first-half profit drops by 20% due to China's slowing economy impacting fuel demand.
China's leading e-commerce company, JD.com, has experienced a significant decline in its stock price due to investor concerns about the Chinese economic recovery and the property market debt crisis, despite positive second-quarter earnings and growth prospects.
Shares of China Evergrande Group fell 87% and lost almost $2.4 billion of its value after the world's most-indebted property developer resumed trading following a 17-month suspension, amid the ongoing crisis in China's property sector.
Chinese investments in Brazil dropped by 78% in 2022, reaching the lowest level in 13 years, primarily due to a decrease in funds allocated to resource projects, according to the Brazil-China Business Council.
South Korea's exports are expected to have fallen 11.6% in August, marking the 11th consecutive month of decline, as China's economic recovery remains sluggish and demand weakens in other regions.
Japan's factory output fell more than expected in July, indicating a challenging start to the second half of the year for manufacturers amid concerns about China's growth and the global economy. Output declined 2.0% in July from the previous month, driven by decreased domestic and overseas orders, particularly in the electronic parts and production machinery sectors. However, car production rose 0.6% due to improved supply chain conditions.
German exports fell 0.9% in July, less than expected, due to global demand weakness and supply-chain friction.
Most Asian stocks fell on Tuesday due to concerns over slowing growth in China, a property sector meltdown, and hot inflation readings, which raised concerns over higher interest rates. Chinese stocks were the worst performers, with investors growing impatient with Beijing's slow approach to stimulus measures.
The Dow Jones Industrial Average fell after weak economic data from China, while U.S. oil prices rose and Tesla's stock gained due to increased sales in China.
U.S. manufactured goods orders experienced a significant 2.1% decline in July, the first drop in four months, due in part to higher interest rates impacting business equipment spending.
German industrial orders fell more than expected in July, declining by 11.7% on a seasonally and calendar adjusted basis, due to a large order in the aerospace sector the previous month, indicating weakness in the global economy and high energy costs.
The Dow Jones Industrial Average fell 0.6% as major indexes tested their 50-day lines, while the S&P 500 and Nasdaq both experienced declines midday.
China's imports and exports experienced a monthly decline in August, with exports falling by 8.8% and imports falling by 7.3%, indicating ongoing challenges despite some slight improvement.
Apple stocks fell 3.6% after China reportedly banned officials from using or bringing iPhones and other foreign-branded devices into the office, signaling Beijing's push to reduce dependence on American technologies.
Apple shares fell over 2.6% as China plans to extend a ban on iPhone use to state-owned corporations, while Dutch Bros dropped 6% after announcing a public offering of $300 million in shares, and Dave & Buster's shares fell over 3% due to weaker-than-expected earnings.
The Hong Kong-listed shares of Alibaba Group fell over 4% after the surprise departure of former CEO Daniel Zhang from the company's cloud computing business.
China's consumer prices returned to positive territory in August, increasing by 0.1% from a year earlier, while producer prices fell for the 11th consecutive month; analysts expect consumer prices to recover and services inflation to pick up as energy prices stabilize and the output gap narrows.
Japan's core machinery orders fell more than expected in July, reflecting manufacturers' reluctance to invest due to sluggish global growth and weakness in China, signaling challenges for the country's economy.
US stocks fell on Friday, with the S&P 500 down 0.9%, Dow Jones down 0.5%, and Nasdaq down 1.4%, as concerns about giving up the week's gains outweighed China's improved economic performance, a historic strike by the United Auto Workers, and positive signs of resilience in the US consumer and inflation pressures that make a case for more Fed rate hikes.
Despite efforts to attract foreign capital, foreign direct investment in China has dropped by over 5% in the first eight months of the year due to the slow recovery of the global economy and geopolitical tensions, with increasing investment flowing towards Southeast Asia instead.
Japan's exports to China declined for the ninth consecutive month in August, dropping 11%, due to weak demand and the suspension of seafood imports following the Fukushima Daiichi nuclear plant incident.