US market – Negative came from China

File Photo WSJ

UNITED STATES (VOP TODAY NEWS) — On Thursday, a block of Chinese macrostats for February was published. The data confirmed the thesis about the slowdown of the economy of China. So far, there have been no significant changes in trade negotiations between the United States and China.

US stock futures are consolidating on premarket. On Wednesday, key indices added about 0.6-0.7%. The resistance zone on the S & P 500 is 2790-2820 points, the index entered this range. With its passage the next reference point will be 2870-2880 points.

Risks

Problems of the world economy.On Thursday, the macrostats block for China was published in February. Growth in industrial production of g / g was 5.3% against 5.7% in January. Unemployment rose from 4.9% to 5.3%.

This happened against the background of a slowdown in the growth of aggregate financing, including a weakening of the credit impulse. Since the end of 2018, the China Macrosurprise Index is in a deeply negative area, that is, the actual data is much worse than analysts’ consensus forecasts.

Trade negotiations.Donald Trump said Wednesday that he is not in a hurry to reach an agreement with China, although he is optimistic about the progress in the negotiations. According to a Bloomberg report, the meeting between the leaders of the two countries may be postponed at least until April. Brexit.

On Wednesday, the British parliament voted against the hard scenario Brexit, that is, without an agreement.

On Thursday, a vote will be held on the question of postponing the procedure outside the deadline of March 29. The delay will require unanimous approval by all 27 EU countries.

Positive factors

. Monetary policy prospects of the Fed.Now the derivatives market lays a 79% chance that the Fed’s key rate will not be increased this year. Data on consumer and producer inflation in the US for February play in favor of this scenario. CPI growth was 1.52% per annum, which is below the 10-year average of 1.58%.

Chinese stimulation. Since last week, the PRC leadership has announced plans for fiscal and monetary incentives, including tax cuts and the possibility of reducing bank reserve requirements.

Regulators intend to fight the economic slowdown. Formally, there is a natural transformation, exponential growth cannot last forever. However, taking into account external risks, the weakening may turn out to be sharp, which the Chinese leadership cannot allow.

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