n over 20% drop in Greek shares at the reopening of the country’s stock markets after 5 weeks of closure and official government data showing another monthly decline in Chinese manufacturing is weighing on sentiment in US markets with a lower open expected.
Greek stocks reopened for the first time in five weeks and bank stocks went immediately limit down 30% with the rest of the market not faring much better, down as much as 23%. The uncertain solvency of Greek banks had investors moving hand over fist to dump the shares as quickly as possible before the Athens Stock Exchange’s maximum loss for an individual issue was reached and trading halted. Fortune favours the brave so there may be some investors bottom-fishing in select Greek stocks, perhaps in safe-havens like utilities or exporters who could benefit from a weak euro.
The China manufacturing PMI fell to 50.0 in July from 50.2 in June, consensus was for no change. In some sense markets are becoming a little desensitised to small declines in Chinese economic data because it just seems insignificant compared to recent stock market volatility and over-the-top government policy reactions.
For US markets this week, there will be a micro-focus on earnings from media giants like Walt Disney, Time Warner and Twenty-First Century Fox as well as big retailers like CVS Health and Office Depot before the big macro event of the August unemployment report on Friday.
On Monday personal income and spending and ISM manufacturing data is expected.
Quarterly results from AIG, Clorox, Tyson Foods and Allstate are some of the earnings highlights for Monday.
Futures suggest the:
will open 1 point lower at 2,102 with the
expected to open 7 points lower at 17,682 and the
2 points lower at 4,586
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