U.S. stocks feel heat from earnings and rates outlook - BNN Bloomberg

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Global equities struggled on Wednesday as investors braced for more policy-tightening from the Federal Reserve, even as results from some of the biggest European and American companies hinted at a softening economy.

The European benchmark fell, snapping six days of gains. LVMH slumped as much as 4.5 per cent, dragging the luxury-goods sector lower, after Europe's biggest company provided further evidence of a slowdown in spending by wealthy consumers in the U.S. Miners underperformed after Rio Tinto Group reported a drop in first-half profit, driven mainly by fading demand from China. On the plus side, Rolls Royce Holdings Plc surged as much as 25 per cent after the engine maker boosted profit guidance.

“We are going to see some deceleration in corporate earnings, deceleration in economic growth, softening of demand, all of this will have a higher impact on equities,” Aarthi Chandrasekaran, director of investments at Shuaa Asset Management said on Bloomberg TV. Still, “the U.S. economy is weakening but it's not weakening enough to price in a full rate cut next year,” he said.

The better growth outlook has lifted the Dow Jones Industrial Average for 12 days straight — the longest winning run in over six years — and a 13th day of gains will extend the record to the longest since 1987 More broadly too, growth is proving relatively resilient, prompting the International Monetary Fund to raise its outlook for the world economy. It now expects global gross domestic product to expand three per cent in 2023 and while that's slower than last year's 3.5 per cent, it's faster than April's 2.8 per cent projection.

 

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Bonds gain, U.S. stocks muted after weak European data - BNN Bloomberg​Global bonds rallied and stock markets were muted Monday, as sharp declines in manufacturing and services gauges across Europe fanned concerns about economic growth.
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