🥇 First rule of investing? Know when to save! Up to 55% off Investing Pro before BLACK FRIDAYCLAIM SALE

U.S. Opening Bell: Disappointing Chinese Data Sends Futures, Stocks Lower

Published 16/05/2022, 11:46
  • Economic worries return
  • Bitcoin slid below $30,000
  • Oil crept lower
  • Key Events

    Retail sales data from China showed that the economy there was harder hit by recent coronavirus restrictions than expected. The news dented traders' optimism that had seen markets rebound last week.

    The change in sentiment drove futures on the Dow Jones, S&P 500, NASDAQ 100, and Russell 2000 and European stocks lower.

    US Treasury yields recovered from the recent selloff.

    Global Financial Affairs

    US futures were trading in the red almost at a similar scale to last week's rebound. NASDAQ 100 futures were the deepest in negative territory after outperforming on Friday.

    Similarly, contracts on the Russell 2000 were the second poorest performer, followed by the S&P 500 and the Dow, which outperformed in last week's final session.

    In Europe, the STOXX 600 Index opened 0.6% lower, with travel and personal-care-related stocks leading the selloff. Conversely, telecoms outperformed after UK-listed telecoms operator, Vodafone (LON:VOD) surged 3.8% at the open, after Emirates-based telecoms company, e& announced it bought a 9.8% stake in the British mobile phone operator.

    Vodafone Daily

    Friday's bullish hammer may have found independent support at the Mar. 9 lows or developed amid informed money's demand. The stock avoided registering a lower trough, establishing a downtrend.

    Asian markets were mixed, as a 11.1% YoY drop in Chinese retail sales data—nearly double estimates—exacerbated the outlook for higher US interest rates.

    China's industrial output also declined 2.9% while forecasters were expecting an increase. This data looks especially weak against the backdrop of China's new bank loans falling to a four-year low and the PBoC disappointing investors hoping for a rate easing—although regulators did lower mortgage loan interest rates for select home buyers.

    China's Shanghai Composite underperformed the region, with a 0.34% decline. Japan's Nikkei 225 rose 0.45%, outshining regional competitors. Precision Instruments, Chemical, Petroleum & Plastic, and Non-metal Mineral sectors led the gains.

    Yields on the 10-year note pared losses. This year, treasuries have been leading equity selloffs as investors attempt to gauge the Fed's often elusive plan for interest rates.

    10-Year Treasuries Daily

    Will the yield be able to climb back above the uptrend line?

    Inflation fears have dominated the narrative this year, crushing bond bulls. However, China's recent weak data is making a good case for concerns on global growth which may encourage investors back into bonds.

    If, until now, the outlook for higher rates caused bond selloffs—which pushed yields higher after a 12% loss—debt may pull investors back in as a hedge.

    The dollar fell for the second day, giving up an initial rebound. Conversely, the euro rose for the second day.

    Euro Daily

    However, the advance is seen within the prism of a return-move to a rising flag—bearish after the initial plunge.

    Gold fell for the third straight day toward our target.

    Gold Daily

    The price deepened its penetration past the rising trend line after completing a bearish triangle.

    Bitcoin ended a three-day gain, falling below the critical $30,000 level.

    Bitcoin Daily

    The crypto leader may be forming a Rising Flag, bearish after the initial plunge, even more so, within our broader oft-repeated bearish call.

    Oil dropped as mounting concerns over China's economy—the world's foremost oil importer—increases the likelihood for lower demand.

    Oil Daily

    The price is showing signs of falling toward the $100 level, the bottom of a range. However, an upside breakout will likely propel the price toward $125.

    Up Ahead

    • On Tuesday, the Reserve Bank of Australia releases minutes of its May policy meeting.
    • US retail sales data is published on Tuesday.
    • Chair of the Federal Reserve, Jerome Powell is due to speak on Tuesday.

    Market Moves

    Stocks

    • The MSCI Asia Pacific Index rose 0.2%
    • The MSCI Emerging Markets Index rose 0.2%

    Currencies

    Bonds

    • Germany's 10-year yield advanced to 0.99%
    • Britain's 10-year yield rose to 1.79%

    Commodities

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.