Stock markets stalled on Tuesday following a spate of Chinese data showing a worsening economy at the end of last year as investors await further indicators and company results later in the year. In Europe, the indices paused after a strong start to the year: Paris fell by 0.19%, Frankfurt by 0.24%, London by 0.13% at around 08:35 GMT. The trend varied in Asia. On the one hand, the Tokyo stock market rebounded (+1.23%) after two sessions of decline, supported by the slight decline in the yen pending a monetary policy decision by the BoJ on Wednesday.
The Chinese markets, on the other hand, were cooled by the announcement of Chinese gross domestic product growth of 3% in 2022, one of the weakest in the last 40 years: the Hang Seng index lost 0.78% and the stock market of Shanghai 0.10%. . In the fourth quarter, Chinese growth slowed to 2.9% year on year versus 3.9% in the previous quarter. Even in China, retail sales, the main indicator of household spending, decreased again in December (-1.8% yoy), after the collapse in November (-5.9%). For its part, industrial production decreased last month (+1.3% over one year), after rising by 2.2% in November.We could see a strong rebound in the next quarter as the Chinese New Year approachesHowever, believes Michael Hewson, an analyst at CMC Markets.
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Labor Market Statistics (November) in Great Britain and Germany’s ZEW Barometer (January) which measures investor sentiment and the Empire State Monthly Index (Tuesday), which measures manufacturing activity in the New York region, will be added to several business results. The financial Morgan Stanley and Goldman Sachs are expected before the opening of the US markets that had been closed for a long weekend of three days. “The prospect of a recession is not in itself bad news for markets. Falling earnings expectations, resulting from a recession, yes. So all eyes are on business results!“, points out Ipek Ozkardeskaya, an analyst at Swissquote Bank. Investors will also be on the lookout for speeches from big business and central bankers at this week’s World Economic Forum.