Stock markets around the world were little changed on Monday as investors awaited the onslaught of corporate earnings to be released this week, which could help offset signs of weakness in the economy.
Reuters reported that markets were held back by a weak read on United Statesretail sales, though a milder-than-expected slowdown in China’s economic growth lifted shares in Asia and Europe.
The US dollar edged slightly higher while the euro fell on continued expectations that the US Federal Reserve will be first among the major central banks to scroll back on ultra-loose monetary policy. Yields on the 10-year US Treasury rose and Bunds rebounded.
US retail sales rose 0.4 per cent in June, only half the 0.8 per cent economists polled by Reuters had expected. The disappointment was tempered by accelerating growth in New York State’s manufacturing sector in July, according to a report from the New York Fed that provides one of the earliest monthly guideposts to US factory conditions.
The mixed picture added to the debate over when and how quickly the Fed would start to slow its stimulus program, which has been widely credited with driving major stock indexes to all-time highs.
European stocks rose 0.3 per cent, as the Chinese data eased fears over a slowdown in China, the world’s second largest economy. US shares were flat, supported by strong earnings at Citigroup Incorporated. Shares of the bank rose 2.1 per cent to $51.87, and the S&P 500 financial industry sector index gained 0.3 per cent.
“There aren’t many sellers in the market, but there’s a sense that with earnings coming up, everyone is lined up waiting for the gun to go off,” said Wayne Kaufman, chief market analyst at Rockwell Securities in New York. “Retail sales were disappointing, but Citigroup had good news. But that news was largely expected.”
While earnings for the second quarter have largely come in stronger than expected so far, only a small percentage of S&P 500 components have reported to date. This week will see results from dozens of components, including numerous Dow components.
US shares were also boosted by Boeing Company, which jumped threeper cent to $104.91 as an investigation into a fire that broke out on one of the company’s 787 Dreamliners did not blame the plane’s batteries.