What could go wrong?
Well, a jumpback in crude oil prices gave worriers something to chew on. Oil hit a 2024 high and was heading for a second weekly gain – in part spurred by the U.S. economic growth picture, but also signs of more Chinese stimulus emerging alongside Middle East supply concerns.
That said, year-on-year crude prices are tracking losses of more than 5%.
But the corporate earnings season wasn’t all sweetness and light either.
Electric automaker Tesla’s latest sales warning saw it depart the ‘Magnificent Seven’ of megacap stock leaders – shedding 12% and some $80 billion in market cap on Thursday.
And chipmaker Intel was another outlier, plunging 10% overnight after the bell as it forecast revenue for the first quarter that could miss market estimates by more than $2 billion.
Wall St futures were slightly in the red ahead of Friday’s open. The dollar index was a touch lower.
The other concern is whether China’s officials can get across the worrying economic and market funk there.
Aided by some signs of more potent monetary and fiscal stimulus measures from Beijing this week, Bank of America data showed investors poured almost $12 billion into Chinese equity funds in the week to Wednesday, the most in a week since 2015.
But as China prepares for the Lunar New Year holiday break early next month, stock markets there gave back some of the week’s bounce on Friday and many foreign investors remain unsure of how the government can restore confidence and stabilise the ongoing property bust.
A key offshore bondholder group of China Evergrande plans to join a petition to liquidate the developer at a hearing in a Hong Kong court on Monday. The bondholder group owns more than $2 billion in offshore notes guaranteed by Evergrande and its support to a winding-up petition against the world’s most indebted developer increases the chances of an immediate liquidation order.
And many provinces in China, including the financial hub of Shanghai, have set modest 2024 economic growth targets after missing their previous goals, in a sign that a nationwide recovery to pre-pandemic levels would prove elusive this year.
On the other hand, relatively wealthy Chinese still seem to be spending. LVMH jumped 8.2% in Europe after the world’s largest luxury group posted a 10% rise in fourth-quarter sales, driven by resilient demand, including from China.
