Stock market: What’s going on in the market ahead of Monday’s opening

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Market review. Global stock markets rallied on Monday amid conflicting indicators on the health of the global economy between the US and China ahead of the Wall Street open.

European markets were hovering around balance as hopes of an interest rate cut from the US Central Bank (Fed) faded among investors.

After finishing a positive week, the fourth in a row for the tech-dominated Nasdaq, New York indexes looked red.

Stock index at 8:00 am

In the US, Dow Jones futures fell 184.00 points (-0.55%) to 33,534.00 points. S&P 500 futures were down 24.50 points (-0.57%) at 4,256.50 points. Nasdaq futures fell 54.25 points (-0.40%) to 13,523.50.

In London, the FTSE 100 posted a fall of 18.32 points (-0.24%) to 7,482.57 points. In Paris, the CAC 40 retreated by 3.87 points (-0.06%) to 6,549.99 points. In Frankfurt, the DAX fell 23.69 points (-0.17%) to 13,772.16 points.

In Asia, the Tokyo Nikkei gained 324.80 points (+1.14%) to 28,871.78 points. For its part, the Hong Kong Hang Seng ended down 134.76 points (-0.67%) at 20,040.86 points.

On the oil side, US WTI fell US$4.90 (-5.32%) to US$87.19 a barrel. Brent North Sea crude fell US$5.09 (-5.19%) to US$93.06 a barrel.

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Stock markets were particularly weighed down by unexpected slowdowns in retail sales and industrial production in China in July due to the return of Covid-19 and the real estate crisis.

In response to these indicators, the Chinese central bank cut several of its key rates to support the economy while “poor Chinese data fueled fears of a global recession”, observed Ipek Ozkardeskaya, analyst at Swisscote.

“Markets have had a disappointing start to the week as the reality of Chinese economic data collides with investors’ eternal optimism,” observed Craig Erlam, analyst at Onda.

According to Mr. Erlam, markets are showing “a strange tendency to hide their face on the real economic situation until the Fed steps up its key rate hikes.”

“It doesn’t seem to be working,” he added.

Encouraging U.S. indicators last week, including slowing inflation and rising household confidence, “showed a glimmer of hope that things could get better in the second half, but Fed members immediately warned that inflation in the U.S. was at a particularly high level, requiring prolonged intervention by the institution.” It will be necessary, underlined Ms. Ozkardeskaya.

According to Ipek Ozkardeskaya, the Fed’s minutes, expected on Wednesday, “will undoubtedly confirm that the institution remains focused on its objective of reducing inflation”.

Also in the eyes of investors are “spending figures for consumers in China, the US and the UK, and there appears to be little cause for celebration,” warned Michael Hewson, an analyst at CMC Markets.

Oil prices extended their losses on Monday after Iran’s diplomacy chief said his country would send a “final proposal” on the nuclear file before midnight.

The prospect of a deal that would allow Iranian production to return to the market, even as Chinese demand suffers from a sluggish economy, could see crude oil prices lose about 5%.

Hydrocarbon giants suffered losses in the stock market. At 7:40 a.m. Quebec time, French Total Energy lost 2.43% and British Shell lost 2.53%. In intra-session trading, American Exxon Mobil and Marathon Oil fell 2.82% and 3.45% respectively.

The euro lost 0.54% against the greenback at US$1.0205.

Bitcoin was down 0.24% at US$24,268.

German food supplier HelloFresh jumped 4.76% at 7:30 am. The company confirmed the results it published in a preliminary report in July, noting that quarterly adjusted Ebitda fell 7.5%.

Among German Deliveries, Dutch Just Eat Takeaway gained 3.69% and Deliveroo in London gained 2.32%.

Placed under US bankruptcy since early July, Scandinavian airline SAS announced on Sunday an agreement with a fund managed by Apollo Global Management, guaranteeing it a US$700 million loan. Around 7:50 am, the title jumped 7.22%.

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