Stocks, futures decline as China data hits sentiment

Bloomberg

Stocks fell with US equity futures on Thursday as investors parsed economic data from China that showed the path of economic recovery from the pandemic remains bumpy.
The Stoxx Europe 600 Index tracked Asian shares lower after Chinese retail sales in June missed estimates and continued to contract, even as the economy returned to growth in the second quarter. Futures on the three main American equity gauges pointed to a weak start on Wall Street.
Oil retreated from a four-month high after the Opec+ alliance confirmed it would start tapering output cuts from next month.
The euro fluctuated and
regional bonds were mixed ahead of the European Central Bank’s policy decision, where it’s expected to keep its emergency bond-buying program unchanged but will likely face the questions over whether the current level of support is
sufficient.
The reminder of the long road ahead to a full global recovery is quashing optimism in financial markets earlier in the week spurred by progress in developing a coronavirus vaccine. While China is seeing a modest domestic recovery, it remains highly vulnerable to setbacks as shutdowns continue to hamper activity across the globe.
“The problem is, this is still uneven,” Helen Qiao, chief greater China economist at Bank of America Corp., said on Bloomberg TV, referring to the latest data. “It is hard to see how China can remain on a firm footing at a time when the rest of the world is still coping with a very deep recession.”
Meanwhile, President Donald Trump has indicated to aides that he doesn’t want to further escalate tensions with Beijing, and has ruled out additional sanctions on top officials for now, according to people familiar with the matter. His administration is considering a sweeping ban on travel to the US by Chinese Communist Party members, though Trump may in the end reject the plan, according to a report.
Futures on the S&P 500 Index decreased 0.6% as of 9:08 am London time and the Stoxx Europe 600 Index dipped 0.9%.
While Germany’s DAX Index dipped 0.7%, the MSCI Asia Pacific Index decreased 1.4%.
The Bloomberg Dollar Spot Index was little changed and the euro was little changed at $1.1411.
While the Japanese yen was little changed at 106.95 per dollar, the British pound fell 0.3% to $1.2553.
The yield on 10-year Treasuries dipped one basis point to 0.62%, Germany’s 10-year yield decreased one basis point to -0.45%. Britain’s 10-year yield declined one basis point to 0.153%.
While West Texas Intermediate crude dipped 0.8% to $40.85 a barrel, gold weakened 0.3% to $1,804.85 an ounce.