Earlier today the United Kingdom published its retail sales reports for the month of August. Year-on-year, retail sales dropped to 0% against an expectation of 2.7%, with sales excluding fuel dropping to -0.9%, more than 3% below the forecast.
Furthermore, the eurozone published data on inflation for August. According to the reports, core inflation was exactly as expected at 1.6%; all other reports also matched the forecasts, but that was hardly surprising, considering these are the final numbers for August.
Later today we expect the Michigan surveys on consumer sentiment and inflation expectations for September.
In other news, today investors are very interested in the Chinese market. The People’s Bank of China announced $14 billion worth of short-term stimulus to keep things calm as developer giant Evergrande is expected to announce bankruptcy very soon. The Chinese yuan and stock indices are doing better in response to the stimulus.
Nevertheless, Evergrande is not the only Chinese development company that is struggling at the moment. Others are facing similar financial challenges. This has caused a massive drop in the demand for iron, which is contributing to the massive drop in the value of iron ore.
Iron-mining companies such as Anglo American, Rio Tinto, and BHP Group are also seeing a drop in their share value due to these developments.
US stock indices today will also be trading lower because market sentiment is rather pessimistic at the moment. The fourth wave of the coronavirus pandemic is raging on and fundamentals from the world’s most important economies are showing signs of wear and tear in the global economy, which is depressing sentiment.
Moderna and Pfizer remain companies of interest as the FDA is gathering to discuss whether to allow booster shots or not. The FDA has to review safety data for a third dose of the two Covid-19 vaccines, but if it rules in favor of the booster shot, both Moderna and Pfizer will make huge profits.
