Chinese GDP prints in line
Today’s Chinese GDP numbers have printed in line with market consensus estimates of year on year growth at 7.6% for the second quarter of this […]
Today’s Chinese GDP numbers have printed in line with market consensus estimates of year on year growth at 7.6% for the second quarter of this year. Our views haven’t changed, well documented upon the release of trade numbers out on Wednesday. We continue to see this as a turning point for the Chinese economy, with inflation now completely under control and the government ready to start stimulating demand. We think the third quarter will surprise on the upside the annualised rate finish off the year slightly above 8%. Again, we see no dooms day scenario for China and think Asian equities will see a mild improvement over the next few months from recent lows.
The focus next week is likely to shift to US reporting. We estimate just more than half of the S&P500 financials index will report their second quarter earnings numbers over the next week. Analysts have been trimming forecasts over the past few days so we don’t expect any large misses. We also don’t think there will be any large losses, or blow ups, like we saw with JP Morgan. Should the US financial emerge in reasonable shape, from an earnings perspective, this will provide support for the S&P500 and thus create somewhat of a floor for the rest of the names to report. It’s a big if, but we think the most likely scenario. Again, that will spill over into some good news for Asian markets. The next week will no doubt be a very interesting one.
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