US markets look set to open higher today as investors brush off the potential implications of referendums in eastern Ukraine as mixed Chinese data overnight and talk of a ‘new normal’ from Chinese president Yi point to possible stabilisation of Chinese growth. Futures suggest the S&P 500 will open 2 points higher at 1,880 with the Dow Jones expected to open 14 points higher at 16,597. On average, according to 2012 data 11% of S&P 500 company revenues come from China so the performance of the Chinese economy is increasingly important. President Yi is suggesting that Chinese growth will be lower but more stable in the future. The lower part is definitely coming through according to recent economic data but the stable part remains to be seen. The country’s housing market is still in bubble territory and anti-corruption and pollution government policies will mean less gift-giving and factory closures, both of which are negative for growth and bad for US multinational earnings. From an earnings perspective, the focus for this week will likely be retail company heavyweights Wal-Mart, Macy’s and Nordstrom as well as US economic bellwethers, Cisco and Deere. With nine out of ten S&P 500 companies having reported earnings already, the retail sector has thus far been one of the weakest with only about a third so far having beaten estimates. Revenues have increased over earnings suggesting the price-cutting continued after Christmas with a negative impact on profit margins. Despite overall retail sales growth in April, management have for the most part have again offered a negative guidance for the next quarter. With consumption making up 70% of US GDP and retail sales about half of that consumption, the sector looks like it will continue to be a significant drag on US economic growth.