Global stock markets rose on Monday as investors reacted positively to China’s plans to boost consumer spending. Relief over a U.S. government shutdown being avoided contrasted with disappointing U.S. economic data. Investors are focused on central bank rate decisions as well as China’s efforts to tackle deflation and stimulate economic growth amidst trade tensions.
Global stock markets commenced the week positively on Monday, buoyed by China’s intentions to invigorate consumption in the world’s second-largest economy. Central bank rate decisions are also a focal point for investors. Relief following the avoidance of a U.S. government shutdown helped to offset disappointing economic data from the United States.
Investors are monitoring Beijing’s approach to catalyze consumer spending, particularly in the wake of post-Covid economic struggles that have hindered growth. The proposed measures include increasing household income through property reforms, stabilizing the stock market, and incentivizing lenders to offer consumer loans with favorable conditions.
“Hopes that a new consumer life raft in China will buoy up the country’s prospects of recovery have helped lift sentiment slightly, but caution remains,” commented Susannah Streeter, head of money and markets at Hargreaves Lansdown. The initiatives also aim to enhance pension benefits and establish a childcare subsidy system while safeguarding workers’ rights to rest and holidays.
This move comes after recent data revealed a decline in consumer prices, signaling deflation for the first time in a year. Economists from Moody’s Analytics warned that the ongoing trade tensions with the United States could exacerbate these deflationary concerns, suggesting that “the chaos of tariffs and rising unemployment will keep consumer spending weak, denting inflation’s demand drivers.”
Asian markets thrived, with Hong Kong continuing its strong performance driven by interest in Chinese technology stocks, while Shanghai and Tokyo also saw growth. European indices in London, Paris, and Frankfurt mirrored these gains, and Wall Street experienced an uptick despite weaker than anticipated inflation figures.
Briefing.com analyst Patrick O’Hare highlighted the encouraging aspects of control group sales, despite a lackluster overall retail sales report. However, he noted a significant rise in prices paid by businesses, raising concerns about stagflation—a combination of high inflation, weak demand, and elevated unemployment.
Attention remains on the economy as the week unfolds, with pivotal policy decisions expected from the U.S. Federal Reserve, Bank of Japan, and the Bank of England, all anticipated to maintain current interest rates. The Fed will also release its economic projections amid concerns regarding inflation driven by tariffs.
Gold prices hovered around $3,000 per ounce, following a recent surge prompted by heightened uncertainty surrounding trade policies. “A faltering US dollar and heightened risk aversion… continue to drive demand,” stated Fawad Razaqzada, an analyst at City Index and FOREX.com.
Key market figures include a 0.5% increase in the Dow Jones, S&P 500 up by 0.1%, while the Nasdaq saw a 0.5% decrease. In foreign exchange, the euro rose against the dollar, and both Brent and West Texas Intermediate crude prices increased by 0.7%.
In summary, global stock markets are experiencing positive trends, primarily attributed to China’s plans to stimulate consumer spending amidst ongoing economic challenges. Investors remain cautious due to deflationary pressures and potential impacts from the trade war with the United States. With central bank decisions on the horizon, there is a heightened focus on economic conditions and trends, particularly concerning inflation and consumer behavior. Overall, the marketplace reflects a blend of optimism and caution amidst fluctuating economic indicators.
Original Source: www.wfxg.com
