Chinese markets are celebrating the linkup between the Hong Kong and mainland exchanges scheduled for next week but mixed Chinese trade and inflation data mean US markets are looking at modest gains at the start of a week choc-a-bloc of data from the world’s second largest economy.
Concerns over growth in Europe are likely to continue to be a risk-factor to US stocks this week but until Germany’s GDP report on Friday it may be China that dominates the global growth story. Of late the Chinese Communist government’s micro-stimulus efforts including several billion yuan being pumped into the banking system has stabilised private survey and official statistics.
In the latest trade data, exports from China to the US have been consistent but increased purchasing power from the rising US Dollar may be masking what appears to be a tepid US consumer with many retailers issuing warnings for the upcoming holiday shopping period.
US retail sales numbers are released on Friday and are expected to have improved to 0.2% growth in October; any disappointment there will again raise the question about the quality of jobs created and the distribution of wealth during the recovery. The US economy has come a long way since the since the financial crisis but the sustainability of growth without a strong US consumer is still in doubt.
Berkshire Hathaway Inc (NYSE:BRKa) beat estimates on Friday but net income did fall on the same period last year. Two of Warren Buffet’s top three holdings Coca-Cola (NASDAQ:COKE)and International Business Machines (LONDON:IBMI) disappointed this earnings season costing Berkshire $2.5bn.
Sotheby's (NYSE:BID) is expected to report a loss in third quarter earnings of -38c per share on revenue of $91.28m.
Futures suggest the:
S&P 500 will open 1 point higher at 2,032 with the
Dow 30 expected to open 10 points higher at 17,583 and the
NASDAQ 4 points higher at 4,164.
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