An over 20% drop in Greek shares at the reopening of the country’s stock markets after 5 weeks of closure and official government data showing another monthly decline in Chinese manufacturing is weighing on sentiment in US markets with a lower open expected.
Greek stocks reopened for the first time in five weeks and bank stocks went immediately limit down 30% with the rest of the market not faring much better, down as much as 23%. The uncertain solvency of Greek banks had investors moving hand over fist to dump the shares as quickly as possible before the Athens Stock Exchange’s maximum loss for an individual issue was reached and trading halted. Fortune favours the brave so there may be some investors bottom-fishing in select Greek stocks, perhaps in safe-havens like utilities or exporters who could benefit from a weak euro.
The China manufacturing PMI fell to 50.0 in July from 50.2 in June, consensus was for no change. In some sense markets are becoming a little desensitised to small declines in Chinese economic data because it just seems insignificant compared to recent stock market volatility and over-the-top government policy reactions.
For US markets this week, there will be a micro-focus on earnings from media giants like Walt Disney Company (NYSE:DIS), Time Warner Inc (NYSE:TWX) and Twenty-First Century Fox Inc (NASDAQ:FOX) as well as big retailers like CVS Health Corp (NYSE:CVS) and Office Depot Inc (NASDAQ:ODP) before the big macro event of the August unemployment report on Friday.
On Monday personal income and spending and ISM manufacturing data is expected.
Quarterly results from American International Group Inc (NYSE:AIG), Clorox Company (NYSE:CLX), Tyson Foods Inc (NYSE:TSN) and Allstate Corporation (NYSE:ALL) are some of the earnings highlights for Monday.
Futures suggest the:
S&P 500 will open 1 point lower at 2,102 with the
Dow Jones expected to open 7 points lower at 17,682 and the
Nasdaq 100 2 points lower at 4,586
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