Stock markets face a 'perfect storm' as high rates and China fears bite, analysts warn
Stock markets worldwide experience declines amid concerns over the Chinese property market, rising US bond yields, and poor economic data in China and the UK.
Topics
Posted 8/18/2023, 1:15:26 PM
cnbc.com
Relevant topic timeline:
Chinese authorities have introduced new measures to boost investor confidence in the stock market by reducing trading costs, relaxing rules on share buybacks, and considering extended trading hours and a cut in stamp duty, following recent declines in both the stock and bond markets. These declines have been influenced by China's deteriorating economic outlook, including deflation, weak consumer spending on manufactured goods, rising youth unemployment, and concerns over the property market.
Asian markets are expected to follow the global trend of weakness in stocks, a buoyant dollar, elevated bond yields, and souring investor sentiment, with no major catalysts to change the current market condition.
The stock market experienced a sharp decline as early gains turned into a selloff, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all falling; concerns over rising bond yields and inflation contributed to the sell-off.
Despite concerns over the financial health of the US consumer, projections for a stock market decline may be unfounded as consumers have the capacity to spend, with low debt levels, significant assets, untapped home equity, low mortgage rates, and solid retail spending.
Despite high interest rates, house prices in the US have not declined, leading to frustration and confusion in the housing market as buyers face fierce competition and limited inventory.
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.
Stocks are expected to decline as mortgage rates soar, causing many Americans to be unable to move and resulting in a bubble in home prices, according to economist David Rosenberg.
Asian stock markets mostly lower as Japanese factory activity and Chinese service industry growth weaken, while Wall Street's benchmark S&P 500 rises on hopes that economic data will convince the Federal Reserve that inflation is under control.
European stocks and Asian equities declined as disappointing data from China raised concerns about the country's economic recovery, with the Stoxx 600 dropping 0.7% and the MSCI Asia Pacific Index heading for its first drop in seven days.
Disappointing economic data in Asia-Pacific markets, overinvestment in China, and Chinese electric vehicle companies expanding in Europe are among the key factors impacting global markets, while the price of bitcoin remains volatile with conflicting predictions about its future.
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.
U.S. stock futures decline as bond yields rise despite weak economic news from China and Europe.
Bitcoin and other cryptocurrencies experienced a decline as analysts predict further declines in the market.
The stock market has been stagnant for over a month and it is expected to decline in its next move.
Asia stocks fall as weak economic data in China and Europe raise concerns over global growth, while the dollar strengthens as investors assess the outlook for U.S. interest rates.
Stocks on Wall Street are expected to decline as concerns about inflation raise doubts about the Federal Reserve's decision to cut interest rates, while worries about crumbling demand and falling German industrial orders add to the uncertainty.
Stock indexes decline as concerns about future rate hikes and sluggish market performance in September weigh on investor sentiment, with the tech-heavy Nasdaq Composite falling for the third consecutive day and the Dow Jones Industrial Average and S&P 500 on a two-day losing streak.
Investors are avoiding global stocks with significant exposure to the Chinese market due to concerns over China's property slump and its impact on the economy, causing the MSCI World Index to recover to just 2% below its July-end figure.
Stock futures decline as investors express concerns about the Federal Reserve's potential to maintain a restrictive monetary policy due to rising inflation.
Chinese stocks have passed the worst of the selling pressure and are still attractive to investors due to their cheap valuation and potential for growth, according to CLSA. However, Beijing needs to address concerns and risks in the economy. The MSCI China Index has fallen this year, but a pause in the Federal Reserve's tightening policy is expected to reverse market pessimism.
China's property shares are declining and tech shares are underperforming, leading to a slide in the Asian market, while the European market waits for monetary policy decisions from the ECB and the Bank of England.
Summary: Asian shares mostly decline as investors await U.S. consumer price data and the Federal Reserve's decision on interest rates.
Global markets ended higher as energy stocks climbed supported by Saudi Arabia and Russia's decision to extend supply cuts, while Wall Street's key indexes saw weekly declines due to investor concerns over interest rates and anticipation of upcoming U.S. inflation data. In Asian markets, Japan's Nikkei 225 ended down, Australia's S&P/ASX 200 was up, and Chinese shares rose following improved data on consumer price inflation. The Eurozone's economic growth outlook has been downgraded by the European Commission, and crude oil prices fell.
Asian stock markets fell as Wall Street experienced a decline, with investors preparing for key US inflation data, and a spike in oil prices added to concerns about persistent price pressures and the interest rate outlook.
Stocks declined amid speculation that US inflation data will show persistent price pressures, increasing the likelihood that interest rates will remain elevated; market focus is on the US consumer price report.
Shares of Cboe Global Markets Inc. declined 1.01% as the stock market experienced mixed trading, with the S&P 500 rising and the Dow Jones falling.
The stock market is disregarding signs of an economic slowdown, despite historical evidence suggesting it could be a cause for concern.
The Philippine stock market continues to decline, with concerns about a hawkish central bank deterring foreign investors and wiping out billions of dollars in market value.
The massive retreat of funds from Chinese stocks and bonds is reducing China's influence in global portfolios and accelerating its decoupling from the rest of the world, as foreign holdings of equities and debt have significantly decreased amid China's economic slump and tensions with the West.
China's stock market has slumped due to worrying economic data including falling prices, missed expectations in retail sales and industrial production, and plunging real estate investment, leading analysts to express concerns about an impending downward spiral in the Chinese economy.
Summary: U.S. stocks slumped amid mixed sentiment about the economy, with only the Dow Jones Industrial Average rising for the week, while Asia-Pacific markets mostly fell, and China's venture capital investment dropped by 31.4% compared to 2022 due to its sluggish economy and geopolitical tensions discouraging foreign investors.
Asian shares decline amidst concerns about the Chinese property sector, while Japanese investors sell chip stocks; traders prepare for central bank meetings and the Federal Reserve rate decision.
Asian stock markets mostly declined, with Japan's Nikkei 225 leading losses, as investors were concerned about upcoming central bank decisions and the possibility of the Bank of Japan ending its negative interest-rate policy.
China's economic model is in decline and will have a significant impact on global markets, according to veteran investor David Roche, who predicts long-term struggles for manufacturing-based economies and warns of potential social unrest and geopolitical problems.
Asia-Pacific markets are expected to continue declining as investors wait for China's loan prime rates and the U.S. Federal Reserve's rate decision, while oil prices rise due to supply concerns and all 11 sectors in the S&P 500 trade down.
The outlook of U.S. companies on China's markets in the next five years has hit a record low due to factors such as political tensions, tariffs, slow Covid recovery, and issues in the real estate market; however, complete decoupling between the two economies is unlikely.