Morning Bid: China gloom deepens, Wall Street shines

Morning Bid: China gloom deepens, Wall Street shines

Asian markets are expected to be impacted by the contrasting fortunes of the U.S. and China. The deepening concerns surrounding China’s property sector and the blunt view of the economy from Beijing suggest that the gap between the two countries will widen further. Chinese markets could dampen Asian sentiment on Tuesday, but there are two other potential market-moving events for local investors to watch: an interest rate decision from Indonesia and second quarter GDP data from South Korea.

Chinese stocks ended lower for a sixth day on Monday as the country’s top leaders expressed concerns about the economy, highlighting “new difficulties and challenges,” as well as “risks and hidden dangers in key areas” and “a grim and complex external environment.” Skeptical investors will need convincing that the promised policy support and stimulus will be sufficient for recovery.

In contrast, Wall Street had a positive start to the week. The Dow extended its longest winning streak since 2017 to 10 days, the tech-led rally is spreading across the market, and investors are optimistic about this week’s earnings reports. Even Mike Wilson, a prominent equity bear who had predicted a lower S&P 500 based on poor earnings, admitted that he was wrong.

In Asia on Tuesday, Bank Indonesia is expected to keep its seven-day reverse repurchase rate at 5.75% for the rest of the year, according to economists. The focus will then shift to the exchange rate, as further tightening from the Fed and other central banks could put pressure on the rupiah. South Korea’s growth in the last quarter likely slowed due to high interest rates affecting domestic consumption and weak demand from China impacting exports.

Key developments to watch on Tuesday include Indonesia’s interest rate decision, South Korea’s GDP for the second quarter, and Hong Kong’s trade data for June.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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