Marketmind: “A ways off” and that’s good

A man checks his phone while walking in Shanghai’s Lujiazui financial district at dusk on July 13, 2021. Aly Song/Reuters Sujata Rao gives us a preview of the day ahead. We now know that the Federal Reserve is still “a long way off” from tightening monetary policy. The PBOC validates Fed Chairman Jerome Powell’s view, with data indicating China’s GDP grew 7.9% in the second quarter, less than half the rate in the first. China’s data isn’t all bad: average growth surpassed Q1, and retail sales and industrial output in June above estimates. Read more. However, it demonstrates that officials, who last week injected one trillion yuan into the banking sector, will keep things loose. The markets’ joy, however, did not last long when Powell told Congress that there was no need to accelerate the transition to tighter post-pandemic monetary policy. World stocks are down from recent highs, probably due to an increase of COVID-19 cases in Asia and indicators that the post-pandemic rebound in corporation earnings has peaked. Asian stocks rose, headed by a 1% gain in Shanghai, but U.S. futures, with the exception of the tech-heavy Nasdaq, are generally negative. European markets are also beginning lower, with 10-year Treasury rates at 1.33 percent, down nearly 10 basis points from Wednesday’s peak. The corporate news is all positive: the four largest U.S. banks, Wells Fargo, Bank of America, Citigroup, and JPMorgan, had combined earnings of $33 billion. With assets totaling a record $9.5 trillion, asset management BlackRock outperformed expectations. In Europe, the signs are also promising, with SEB in Sweden, Daimler in Germany, and Just Eat in the United Kingdom all posting strong earnings. Earlier in Asia, TSMC, a Taiwanese chipmaker, reported an 11 percent increase in second-quarter profits. Markets should get additional direction on Thursday as a result of the following key developments: – South Korea held rates steady, but warned that the record-low interest rates of the epidemic period were nearing to an end. read more -In June, the UK added 356,000 jobs read more -Frank Elderson, a member of the European Central Bank’s (ECB) Board of Directors, talks -Bank of England interest rate-setter -Philly Fed index Michael Saunders gives a speech. Powell’s hearing is continuing, as Chicago Fed President Charles Evans speaks. BNY Mellon, Charles Schwab, US Bancorp, Morgan Stanley, and Alcoa reported earnings in the United States. Sujata Rao contributed reporting, and Dhara Ranasinghe edited the piece. The Thomson Reuters Trust Principles are our standards./nRead More