Global shares fell, and the dollar weakened on Monday after the data release indicated slower-than-expected growth in the Chinese economy. However, U.S. stocks managed to rise on the anticipation that company earnings would surpass forecasts and the strong likelihood of continued consumer spending. <h2>China's GDP Growth and Mixed Monthly Data</h2> China surpassed expectations in the second quarter, experiencing a notable growth rate of 0.8%, surpassing the estimated 0.5%. This impressive performance reflects the nation's resilience and economic prowess. However, the annual pace of growth slowed more than expected to 6.3%, well below the expected 7.3%. Analysts view this data as an indication that China's post-COVID economic boom is coming to an end. In contrast, concerns in the United States about a severe economic downturn faded earlier this year as slower consumer inflation has brightened the outlook. This positive trend is reflected in the second-quarter results reported by companies. <h2>Optimistic Outlook for U.S. Earnings</h2> Anthony Saglimbene, chief market strategist at Ameriprise Financial in Troy, Michigan, remarked that while companies face a slightly higher hurdle rate compared to the past few quarters, S&amp;P 500 companies have generally been able to surpass the low analyst estimates that were set prior to the current earnings season. Going forward, the market will closely monitor whether demand remains strong and whether the corporate outlook remains positive for the rest of the year. <h2>Anticipated Earnings Reports and Market Reactions</h2> This week, several prominent tech companies and banks are set to release their earnings reports. Major names reporting include Tesla, Bank of America, Morgan Stanley, Goldman Sachs, and Netflix. The stock market showed positive momentum on Wall Street, with the Dow Jones Industrial Average climbing by 0.18%. Similarly, the S&amp;P 500 experienced an increase of 0.20%, while the Nasdaq Composite outperformed with a significant rise of 0.47%. These upward trends indicate a promising outlook for investors and highlight the market's robust performance.<h2> </h2><h2>European Stocks Weaken</h2> In Europe, stocks experienced weakness, with the pan-European STOXX 600 index down by 0.60%. Meanwhile, MSCI's U.S.-centric gauge of stocks globally showed a slight decrease of 0.01%. <h2>Dollar Remains Steady as Investors Await Fed Meeting</h2> The dollar traded relatively flat against a basket of currencies after experiencing its largest weekly decline in 2023 last week due to decreased Treasury yields. Investors eagerly await the Federal Reserve's upcoming meeting, during which a 25 basis points rate hike is widely anticipated. <h2>U.S. Retail Sales Data and Monetary Policy</h2> The main U.S. economic data for the week will be the retail sales figures for June, set to be released on Tuesday. While this data is not expected to impact monetary policy or market direction significantly, it is anticipated to show a rise of 0.3% ex-autos, aligning with the market's favored soft-landing theme. The futures market is pricing in an additional 32 basis points of tightening this year, with the benchmark rate projected to peak at 5.40% in November. As a result, the market feels that the chances of further rate hikes after the conclusion of the two-day meeting of the Federal Reserve on July 26 are slim. <h2>Treasury Yields and Inflation Outlook</h2> U.S. Treasury yields experienced a sharp decline last week due to the moderation in consumer and producer price inflation during June. This decrease has raised expectations of a more dovish monetary policy. The two-year Treasury yield, which is closely associated with interest rate projections, experienced an increase of 1.5 basis points, reaching 4.766%. In a similar vein, the benchmark 10-year note also saw a rise of 1.4 basis points, reaching 3.834%. These movements in yields indicate a shift in interest rate expectations, potentially impacting various financial sectors. <img src="https://cdn.forexoverflow.io/images/1689614596220-ghv3jwe21gkv64r-chinas-faltering-growth-1.png">Image source from Reuters <h2>Sterling Weakens Ahead of UK Inflation Figures</h2> Sterling reversed its course, declining by 0.2% to $1.3089 in anticipation of the release of UK inflation figures this week. If the data indicates higher inflation, the risk of a substantial rate hike by the Bank of England has increased. Analysts at CBA noted that a lift in the core CPI could encourage financial markets to anticipate further tightening from the Bank of England, potentially pushing GBP/USD towards upside resistance at $1.3328. <h2>Oil Prices Drop Due to Weaker Chinese Economic Growth</h2> Oil prices fell more than 1% after the release of Chinese economic growth data failed to meet expectations. The price of US crude oil experienced a decline of 0.74%, settling at $74.86 per barrel. Similarly, Brent crude oil also faced a decrease of 0.81%, reaching $79.22. These downward shifts in crude oil prices suggest a potential adjustment in the energy market, impacting global economic dynamics and influencing various industries reliant on oil. In Summary, global shares experienced a dip due to disappointing Chinese economic data. At the same time, U.S. stocks managed to gain as investors expressed confidence in strong company earnings and continued consumer spending. The anticipation of key earnings reports and the upcoming Federal Reserve meeting have been key factors influencing market sentiment. Investors will closely watch future developments in China, US retail sales data, and central bank policies to gauge the momentum in global financial markets.

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Explore the impact of disappointing China data on global shares as they slip, highlighting the influence of economic indicators on the market.

China Data Disappoints: Global Shares Weaken

Global Shares Slip as China Data Disappoints; U.S. Stocks Rise

<h2>Key Highlights</h2> <ul><li>Chinese economic growth disappoints, falling short of expectations.</li><li>Two out of three Libyan oil fields have resumed production.</li><li>Sources indicate that Russian oil exports from western ports are expected to decline.</li></ul>&nbsp;<h2>Chinese Economic Growth Falls Short of Expectations</h2> On July 17, according to Reuters, the oil market experienced a decline of over 1% due to weaker-than-expected Chinese economic growth. This development has raised concerns regarding demand in the world's second-largest oil consumer. Additionally, the partial restart of previously halted Libyan output has exerted further pressure on oil prices. <h2>Weakening Chinese Economy Impacts Oil Market</h2> China's gross domestic product (GDP) grew 6.3% year-on-year in the second quarter, below the 7.3% expected by analysts. The post-pandemic recovery of the Chinese economy has faced rapid faltering due to weakening demand both domestically and internationally. This disappointing GDP figure has done little to alleviate concerns about the Chinese economy, as highlighted by Warren Patterson, ING's head of commodities research. <h2>Oil Prices Experience Decline</h2> Brent crude declined 97 cents, or 1.2%, to $78.90 a barrel by 1330 GMT. Similarly, U.S. West Texas Intermediate crude dropped by 83 cents, equivalent to 1.1%, settling at $74.59. These losses mark the second consecutive day of price decline for both oil contracts. <h2>Chinese Data Impacts Market Sentiment</h2> Previously, China's economic data was anticipated with a degree of hope, especially by oil bulls. However, the current economic situation in Asia's driving force appears to favor the bears, according to John Evans, an oil broker at PVM. This sentiment reflects the impact of the disappointing Chinese GDP figures on the market. <h2>Temporary Upsurge and Ongoing Challenges</h2> Although oil prices experienced a brief uptick following a Reuters news alert on Saudi Arabia's extension of a voluntary output cut, the alert was later retracted as it repeated news previously published on June 4. Despite this temporary surge, both Brent crude and U.S. West Texas Intermediate crude witnessed losses, overshadowing the three weeks of gains they had previously achieved, reaching their highest levels since April. The support from OPEC+ output curbs and unplanned outages in Libya and Nigeria was undermined by the resumption of output at two of three Libyan fields that were previously shut down. These fields had halted production due to a protest against the abduction of a former finance minister. <h2>Russian Oil Exports to Decline</h2> Russian oil exports from western ports are expected to fall by 100,000-200,000 barrels per day (bpd) next month, indicating further supply tightening. This development aligns with Moscow's commitment to reducing oil supply in coordination with Saudi Arabia, according to two sources on Friday. The two sources who reported this development have suggested that this is another sign of tighter oil supplies. In Summary, weaker-than-expected Chinese economic growth and the resumption of output in Libya have contributed to a decline in oil prices. These developments have raised concerns about oil demand, particularly in China. Additionally, the anticipation of a decrease in Russian oil exports further impacts market sentiment. As the oil market continues to face challenges, it remains to be seen how these factors will affect prices in the coming weeks.

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Explore the connection between Chinese GDP and the decline of oil prices by over 1%, dampening expectations for demand.

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2 articles published related to#economic growth

Global Shares Slip as China Data Disappoints; U.S. Stocks Ri...

Oil Prices Drop: Chinese GDP Impacts Over 1% Slide

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