BEIJING: Global stocks and Wall Street futures declined Monday ahead of a US economic update that is expected to show growth slowing.London and Frankfurt opened lower. Shanghai and Hong Kong declined while Tokyo advanced Oil prices fell.Wall Street’s benchmark S&P 500 index gained 0.1 per cent on Friday but ended with a small loss for the week.
US data this week are expected to show first-quarter economic growth weakened following interest rate hikes to cool business activity and inflation. That might encourage the Federal Reserve to postpone or scale down more possible rate hikes at its May meeting.
France and Germany also report economic growth this week following surveys that show European factory activity declining.
“There is no doubt that the global economy is weakening and vulnerable to further slowing,” Clifford Bennett of ACY Securities said in a report.
In early trading, the FTSE in London fell 0.2 per cent to 7,901.22 and the DAX in Frankfurt opened 0.1 per cent lower at 15,860.34. The CAC 40 in Paris shed 0.3 per cent to 7,558.20.
On Wall Street, the future for the benchmark S&P 500 index was down 0.4 per cent. That for the Dow Jones Industrial Average was 0.3 per cent lower.On Friday, the S&P 500 and the Dow rose 0.1 per cent as investors focused on the corporate earnings and forecasts.
Health care companies and consumer product makers gained ground, offsetting losses in banks, technology stocks and elsewhere. Truist Financial and KeyCorp, two of the larger regional banks, were among the biggest decliners in the S&P 500. Truist fell 6 per cent and KeyCorp ended 3.7 per cent lower.
In Asia, the Shanghai Composite Index lost 0.8 per cent to 3,275.41 while the Nikkei 225 in Tokyo advanced 0.1 per cent to 28,593.52. The Hang Seng in Hong Kong retreated 0.6 per cent to 19,959.94.
The Kospi in Seoul sank 0.8 per cent to 2,523.50 and Sydney’s S&P-ASX 200 lost less than 0.1 per cent to 7,322.00.
India’s Sensex advanced 0.5 per cent to 59,965.24. New Zealand and Singapore advanced while Bangkok declined.
Forecasters expect Thursday’s data to show US economic growth decelerated to 2 per cent in the first three months of 2023 from 2.6 per cent in last year’s final quarter.
Traders are watching whether the Fed and other central banks can rein in inflation that was near multi-decade highs without tipping the global economy into recession. The Fed is expected to raise its key lending rate one more time at its May meeting and then take a break.
US companies have been beating earnings forecasts. Analysts expected the sharpest drop in S&P 500 earnings per share since the pandemic stunned the economy in 2020. Analysts polled by FactSet expect profits to contract by 6.3 per cent for companies in the S&P 500.
Coca-Cola reports results Monday, followed Tuesday by McDonald’s and Google’s parent, Alphabet.
Airplane maker Boeing and Meta Platforms, Facebook’s parent, report Wednesday. Investors get details on the health of the airline industry when American Airlines and Southwest Airlines report Thursday, along with internet retail giant Amazon.
In energy markets, benchmark US crude lost 13 cents to USD 77.74 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 50 cents on Friday to USD 77.87. Brent crude, the price basis for international oil trading, shed 20 cents to USD 81.26 per barrel in London. It gained 56 cents the previous session to USD 81.66.
The dollar gained to 134.33 yen from Friday’s 134.21 yen. The euro advanced to USD 1.0992 from USD 1.0977.
