Monday's stock market closed slightly lower as disappointing economic data out of China raised concerns about a global recession; investors are also looking forward to a busy earnings week.
Following four straight weeks of gains, stocks were mixed. Dow Jones Industrial Average dropped 0.1%, less than 100 points, S&P 500 lost 0.2%, and Nasdaq Composite lost 0.2%.
China's consumer and factory data came in well below expectations overnight, and the country's central bank surprised investors by cutting interest rates amid slowing economic growth.
In light of China's real estate slump and C-19 lockdowns, investors are concerned about what that could mean for the global economy, reigniting recession fears.
The price of U.S. benchmark West Texas Intermediate dropped over 5% to $87 per barrel on Monday, while Brent crude is now trading at $93 per barrel on concern over a slowdown in Chinese demand.
With China's commitment to zero C-19 the data doesn't bode well for oil demand, says Oanda's Craig Erlam He predicts, With cases continuing to increase, downward pressure on oil prices could intensify
New York Fed's Empire State Manufacturing Survey for August showed a sharp decline in manufacturing activity, with a reading of -31.3, the lowest since May 2020.
The benchmark index rose over 3.2% last week amid optimism that inflation may be slowing and may have peaked, while the Dow and Nasdaq rose 2.9% and 3.1%, respectively.
It is estimated that the S&P 500 was down roughly 20% on June 16, but has since pared back losses to now be down around 11%.
Adam Crisafulli, founder of Vital Knowledge, says stocks have fallen after China's "underwhelming" economic data, but the "ugly" Empire Fed survey is also concerning.
Despite the sharp softening in growth momentum and stubborn inflation readings, the New York Fed survey is certainly a "net negative" as it is the second largest decline on record.
Investors will be watching several major retailers report quarterly results this week, including Home Depot, Lowe's and Walmart. On Wednesday, U.S. retail sales data for July will also be released.
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