Wall Street climbs

By: Miguel A. Rodriguez

12:15, 16 August 2022

Stocks gain despite surprise weak Chinese data

Neither the dismal economic figures from China nor the data on the NY Empire State manufacturing index that fell to levels not seen since the pandemic didn’t stop the upward momentum of the US indices.


China surprised the market by lowering interest rates, unlike the rest of the world's central banks, trying to stimulate the economy, showing alarming signs of weakness.


China's year-on-year industrial production showed a growth of 3.8%, while retail sales fell to 2.7% year-on-year, and fixed asset investments in July only grew 5.7% from 6.1% in the previous month.


Later, the American figure for the NY Empire State manufacturing was released with a drop of -31.30 versus 5.50 expected. This huge deviation alarmed analysts and has once again encouraged the speeches of those who predict a recession in the United States.


But the American stock markets ignored these disturbing data and again experienced widespread increases. Technically, the three main Wall Street indices are already in bullish territory. It can be said that they have left behind the bear market that most investors expected to go on. Yesterday, the portfolios of the main American investment funds were reported, and a good number of them had reduced and even cut their bearish positions.


Despite the latest negative data, the expectation that the Fed will not raise interest rates as much as initially predicted, as well as the latest corporate earnings, are factors that have sparked optimism among investors.


Also playing a big role is that inflation expectations, the main threat to the market for some time, have been lowered substantially. The fall in the price of raw materials, especially oil, contributes to this.


Yesterday it was expected a nuclear agreement with Iran could be reached to eliminate the sanctions that prevent it from exporting oil, allowing it to access the international oil market. If an agreement is reached, it would mean an increase in the supply of around 1 million BPD that would push the price of crude oil down, possibly below $80 per barrel.

GráficoDescripción generada automáticamente



Sources: Bloomberg, Reuters

Share this article

This information prepared by capex.com/za is not an offer or a solicitation for the purpose of purchase or sale of any financial products referred to herein or to enter into any legal relations, nor an advice or a recommendation with respect to such financial products.This information is prepared for general circulation. It does not regard to the specific investment objectives, financial situation, or the particular needs of any recipient.You should independently evaluate each financial product and consider the suitability of such a financial product, by taking into account your specific investment objectives, financial situation, or particular needs, and by consulting an independent financial adviser as needed, before dealing in any financial products mentioned in this document.This information may not be published, circulated, reproduced, or distributed in whole or in part to any other person without the Company’s prior written consent.
Past performance is not always indicative of likely or future performance. Any views or opinions presented are solely those of the author and do not necessarily represent those of capex.com/zaJME Financial Services (Pty) Ltd trading as CAPEX.COM/ZA acts as intermediary between the investor and Magnasale Trading Ltd, the counterparty to the contract for difference purchased by the Investor via CAPEX.COM/ZA, authorised & regulated by the Cyprus Securities and Exchange Commission with license number 264/15.  Magnasale Trading Ltd is the principal to the CFD purchased by investors.