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Robust Chinese growth boosts markets, Americans feel better about the economy than about the president, and the second round of Brexit talks begin. Here are some of the things people in markets are talking about today.
Economic growth in the world's second-largest economy continued at a robust pace in the second quarter, with GDP expanding at a better than expected 6.9 percent. A rebound in industrial output, which rose 7.6 percent in June from a year earlier, far exceeded economists' estimates for a 6.5 percent increase. Domestic stocks tumbled after authorities warned about the build-up of debt across the economy, calling the problem a "gray rhino" -- a highly probable, high-impact threat that people should see coming, but often don’t. The onshore yuan traded near the highest level in eight months after the growth figures were released and the People’s Bank of China set its daily fixing at the strongest level since Nov. 4.
Economy trumps the president
The majority of Americans are feeling optimistic about realizing their own career and financial ambitions, with most also expecting the stock market to end the year higher. It doesn't seem that President Donald Trump is getting much credit for this, however, as just 40 percent of those surveyed for the latest Bloomberg National Poll approve of the job he is doing in the White House. The president will seek to shift the focus from his Russia problems to his domestic agenda with a series of theme weeks on economic policy. This week's theme is "Made in America."
The second round of talks between the U.K. and the EU on Brexit are underway in Brussels this morning, with infighting among ministers in London further clouding the Conservative government's position on the issue. Among the key issues up for discussion in this round are citizen rights, the power of the European Court of Justice, and the length of the transitional period at the end of negotiations. One thing that seems to have almost ended due to Brexit is the push for a European financial transaction tax, as EU states jockey to attract bankers from London.
Overnight, the MSCI Asia Pacific Index ex-Japan added 0.3 percent as equities in the region reacted positively to Chinese GDP data. Japanese markets were closed for a public holiday. In Europe, the Stoxx 600 Index erased earlier gains to trade 0.1 percent lower at 5:50 a.m. Eastern Time after the release of June inflation data for the euro area. U.S. stock futures pointed to a slightly lower open.
It's a big week for financial-sector earnings, with Blackrock Inc. reporting today, Goldman Sachs Inc. and Bank of America Corp. tomorrow, and Morgan Stanley due on Wednesday. Results from JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. last week revealed that the outlook may not be so bright for the sector, despite good results.
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots Podcast: Why the most exciting market in the world right now is in wheat.
- Firms under pressure as labor drought grows, U.S. survey shows.
- Oil skeptics are letting a little sunshine in.
- Fed models say go, but data say no.
- This magic formula reveals how the ECB might taper.
- Going cashless? Bad for tax cheats, privacy and the poor.
- America's opioid epidemic is leading to very difficult choices.