Welcome to moody Monday, with stock futures down and oil prices getting hit hard after a batch of downbeat data from China, alongside a surprise rate cut.
Some say that the global growth engine’s economic issues belong in a different box from the rest of the world, owing to Cihna’s self-imposed slowdown via COVID restrictions. But it’s just more evidence that the global economy remains wobbly. “For the next two weeks, the Federal Reserve should be preparing markets for a reminder from the Fed Chairman at Jackson Hole that the FOMC needs to get to a positive real policy rate, which means rates will be higher for longer,” O’Rourke told clients in a note.
Some are harking back to a June interview with 68-year-old investing titan Stanley Druckenmiller, who said when inflation gets to 5%, “it’s never gone down without a recession,” or the fed-funds rate exceeding the CPI. The buzz China’s central bank unexpectedly cut a key interest rate on the heels of data showing a rebound sputtering, with sluggish factory output and retail sales.
Energy giant Saudi Aramco posted a record $48.4 billion profit, earning more in the first two quarters than Apple AAPL has earned in three.