Salem Radio Network News Thursday, July 7, 2022

Business

Futures slip as China data sparks growth fears

(Reuters) – U.S. stock index futures fell on Monday as downbeat data out of China stoked fresh concerns about a global economic slowdown at a time when investors are already on edge over aggressive policy tightening by the Federal Reserve.

Chinese and European stock markets fell, while oil slid as data showed China’s economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment.

Wall Street closed sharply higher on Friday, but still the S&P 500 and the Nasdaq posted their longest weekly losing streaks in over a decade.

Investors have been worried that aggressive interest rate hikes by the Federal Reserve to combat decades-high inflation could hurt the U.S, economy, with the conflict in Ukraine, supply chain snarls and the latest pandemic-related lockdowns in China further exacerbating the situation.

Goldman Sachs economists cut their forecast for U.S. GDP growth to 2.4% in 2022 from 2.6% previously, citing tighter financial conditions.

The S&P 500 and the tech-heavy Nasdaq have fallen 15.6% and 24.5%, respectively, so far this year, with growth stocks taking a sharp hit on concerns that bigger interest rate hikes could hurt their future cash flows.

Traders are now pricing a near 82% chance of a 50 basis point hike by the Fed in June. [IRPR]

Barring Tesla Inc, other megacap growth companies such as Microsoft Corp, Google owner-Alphabet Inc, Amazon.com, Apple Inc and Meta Platforms slipped about 0.3% in premarket trading.

Big banks were mixed, with Bank of America down 0.2%.

At 07:21 a.m. ET, Dow e-minis were down 28 points, or 0.09%, S&P 500 e-minis were down 11 points, or 0.27%, and Nasdaq 100 e-minis were down 51.75 points, or 0.42%.

After worrying inflation and consumer sentiment data last week, focus is now on the retail sales report due on Tuesday.

Retailers such as Walmart Inc, Home Depot and Target Corp are also due to report their quarterly results this week.

Spirit Airlines jumped 17.1% after JetBlue Airways launched a hostile all-cash takeover bid for the discount carrier. JetBlue shares slipped 1%.

(Reporting by Amruta Khandekar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)

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