Thomas Miller Investment: View from the Front - 15th April
For most people it seems Game of Thrones returning is the highlight of this week, however for a non-watcher I will be focusing my attention instead on the economic data released that could shape where markets move next. Considering the strength of equity markets this year (albeit following a severe fourth-quarter sell-off last year) alongside weakening economic data, we are surely going to have to see data start to improve significantly to lead markets higher. Having said that, a strong corporate earnings season will go some way to help equities march even higher – the earliest signs are positive, which are discussed below in the corporate section.
Arguably the most important piece of data to be released this week is China’s first-quarter GDP growth on Wednesday. Economic growth has been on a steadily decelerating trend over the past seven years as the world’s second largest economy transitions from a manufacturing-led economy to a services-led one. Indeed, it is expected to drop a further gear, down from the annualised rate of 6.6% in the fourth-quarter of last year to 6.3%. China has implemented a huge amount of stimulus into the economy more recently to deal with the impact of trade wars and a general synchronised slowdown. We are starting to see the positive signs of this stimulus showing up in some of the country’s soft data series – if the hard data, such as GDP growth, doesn’t follow this same path and in fact undershoots expectations, we would expect volatility (i.e. fear) to increase in financial markets.
Source Investment Analyst
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