Global stocks fell Monday after data misses signaled a low economic growth rate in the US and China.
Global stocks fell on Monday as disappointing data raised worries that the ongoing rise in Delta variant cases of the coronavirus could hinder economic recovery.
In U.S. markets, S&P 500 futures dropped 0.3%, Dow Jones futures declined by 0.3%, and Nasdaq futures were down 0.21% at 6:12 a.m. ET on Monday.
Concerns over slowing growth in major economies like China and the U.S. are putting pressure on markets. Key Chinese indicators released Monday fell short of expectations, while the University of Michigan reported a significant decline in its U.S. consumer confidence index on Friday.
An update on U.S. retail sales is set for release on Tuesday, and minutes from the Federal Reserve's latest meeting are expected on Wednesday. Investors are also looking forward to next week's Jackson Hole meeting, anticipating insights into the Fed's monetary policy strategy.
"A weak consumer report tomorrow could undermine recent optimism regarding the U.S. recovery as we approach Q3 and build on the Q2 rebound," said Michael Hewson, chief market analyst at CMC Markets, in a note. "Any doubts about the strength of the U.S. recovery, particularly concerning consumer confidence, will only heighten worries about the overall resilience of the global recovery."
In China, July's monthly figures for industrial production, retail sales, and investment activity were significantly below expectations, while unemployment rose. Investors are increasingly worried that the Delta variant's spread—leading to new local lockdowns and partial port closures—is negatively affecting the country’s economic growth.
Asian markets had a mixed performance: Hong Kong's Hang Seng index dropped 0.88%, while the Shanghai Composite edged up 0.03%. Tokyo's Nikkei 225 closed down 1.62%, as concerns over rising COVID-19 cases overshadowed a better-than-expected second-quarter economic growth report.
European markets opened lower on Monday, with Frankfurt's DAX declining 0.71%, London's FTSE 100 slipping 1.22%, and the Euro Stoxx 50 falling 0.88%. Investors are preparing for important economic data this week from Europe, including GDP growth, unemployment rates, and inflation figures.
Oil futures extended their decline, pressured by concerns over economic recovery. WTI crude fell 1.61%, trading at $67.11 per barrel, while Brent crude dropped 1.47% to $69.55 per barrel.
At the same time, investors are closely watching developments in Afghanistan, where the Taliban appears to be gaining control following the government’s collapse and the U.S. withdrawal. Most analysts believe it is too early to determine the potential impact of these events on markets and investor sentiment.
"Geopolitical developments in Afghanistan are dominating headlines, but it may be premature to assess the potential fallout in the FX market," said Francesco Pesole, FX strategist at ING.
Global stocks are on the decline as disappointing Chinese economic data raises concerns about low growth rates. This downturn reflects investor anxiety over the potential impacts of ongoing challenges in major economies, further complicating the outlook for global markets.
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