Asian shares opened the week with mixed trading as China reported a slower-than-expected 4.7% annual growth rate in its economy for the last quarter. Meanwhile, markets appeared unfazed by a shooting at a rally for former President Donald Trump in Butler, Pennsylvania, which is being investigated as an attempted assassination of the presumptive Republican nominee.
China’s ruling Communist Party leaders commenced a four-day meeting in Beijing to establish economic strategies for the next decade. Investors closely monitored the meeting for indications of measures to revive the struggling property market and address local government debts.
China’s annual economic growth declined from 5.3% in the first quarter, but the 5% growth in the first half of the year aligned with the government’s forecast for 2024. On a quarterly basis, the economy expanded by 0.7%. Analyst Yeap Jun Rong of IG commented, “The set of economic data releases from China this morning has not been promising ahead of their upcoming Big Plenum, with the data once again pointing to a mixed bag for the world’s second-largest economy.”
In early Monday trading, Hong Kong’s Hang Seng fell 1.5% due to heavy selling of property developers, while the Shanghai Composite slipped less than 0.1%. The People’s Bank of China left its medium-term lending rate unchanged at 2.5%, which indirectly affects interest rates on mortgages and other loans.
Markets in Tokyo were closed for a public holiday. In Seoul, the Kospi edged 0.1% higher, and the S&P/ASX 200 gained 0.7%. However, Taiwan’s Taiex lost 0.2%, and the SET in Bangkok shed 0.7%.
On Wall Street, U.S. stocks rose after mixed signals on big banks’ profits and inflation failed to dampen the belief that easier interest rates are on the horizon. The S&P 500 closed the week with a 0.6% gain, marking its fifth winning week in the last six, while the Dow rose 0.6% and the Nasdaq composite added 0.6%. The Russell 2000 outperformed with a 1.1% rally, its best week in eight months.
Bank of New York Mellon reported better-than-expected profits for the spring, leading to a 5.2% gain in its stock. Additionally, influential Big Tech stocks like Nvidia contributed to the market’s upward movement after a previous day’s slide.
In the U.S., wholesale prices rose more than economists anticipated, disappointing after better-than-expected consumer-level inflation data. However, expectations for high inflation have eased for the second consecutive month, alleviating concerns of a potential inflationary spiral. Traders are now anticipating a 94% probability of the Federal Reserve easing rates in September, which would alleviate the pressure on borrowing costs for housing, cars, and credit card purchases.