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Global shares seesaw as investors weigh up evidence of a slowing Chinese economy ahead of a data-heavy week

Added 05-16-22 05:14:02am EST - “Investors are increasingly concerned that the combination of Chinese COVID lockdowns, high inflation and rising rates will hurt global growth.” - Markets.businessinsider.com

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Posted By TheNewsCommenter: From Markets.businessinsider.com: “Global shares seesaw as investors weigh up evidence of a slowing Chinese economy ahead of a data-heavy week”. Below is an excerpt from the article.

Global stocks seesawed on Monday, after reports showing the dramatic impact on China's economy from its zero-COVID policy added to existing concerns about rising inflation ahead of a data-packed week.

US stock futures fell, indicating there may be some profit taking at the start of trade later, after the benchmark indices staged a strong rebound on Friday. S&P 500 futures dropped 0.3%, while those on the Dow Jones lost 0.1%, and those on the Nasdaq 100 were down by 0.5%.

Chinese government figures on Monday showed retail sales slid by 11% in April, their largest drop in two years, as consumers under strict COVID-19 lockdowns were unable to hit the stores. A separate report showed an unexpectedly large decline in industrial output, which fell 2.9% last month, compared with estimates for growth of 0.4%. 

"These numbers are unlikely to improve significantly in the coming months, given that China is unlikely to alter its zero-COVID policy, given the vulnerability of its health service to too many infections, which means that after a poor Q1, Q2 could well be even worse," CMC Markets chief strategist Michael Hewson said.

"The poor nature of these numbers, along with the probability of how much improvement can be expected given China's zero-COVID policy, [mean] Asia markets have seen a mixed start to the week, which looks set to translate into a lower open for markets here in Europe," he said.

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