Economy1 hour ago (Jul 30, 2021 06: 43AM ET)
By Geoffrey Smith
Investing.com — Stock futures slide as Amazon (NASDAQ:)’s slowing sales growth undermines the narrative for growth stocks. Chinese stock markets reverse after fresh regulatory action and trouble with overleveraged property developers. U.S. personal consumer expenditure price data will be scanned for signs of inflation. And the Eurozone grew faster than expected as the continent reopened in spring. Here’s what you need to know in financial markets on Friday, 30th July.
1. Concern at Amazon’s growth slowdown
Amazon stock trading after signs that the pandemic-driven boost to its core e-commerce business is fading.
The company said net sales growth fell to 27% year-on-year from 44% in the first quarter, despite the group moving up its annual Prime Day from its usual slot in the third quarter. Sales growth since then has only been around 15%, CFO Brian Olsavsky was quoted by Reuters as saying.
The development means that three of the five megacap stocks that have carried the stock market this year weakened after their quarterly updates (Apple (NASDAQ:) and Facebook (NASDAQ:) being the other two). Elsewhere, Pinterest (NYSE:) stock fell nearly 20% in premarket after it, too, was after a disappointing quarterly report.
2. Chinese markets head down again
China’s stock market bounce . Hong Kong’s fell 1.3%, and mainland indices fell by between 0.5% and 2.3%, on a combination of factors that revived existing concerns.
Regulators issued a high-profile warning to root out ‘illegality’ among ride-hailing groups, a move interpreted as a fresh attack on the national champion Didi Global (NYSE:). Didi ADRs fell 7.2%.
In addition, China Evergrande Group (OTC:) shares fell as much as 11% to new record lows after of the highly-indebted real estate developer’s listed onshore subsidiary. The group’s bonds also slumped, with spillover effects on to the bonds of other companies in the sector.
Market sentiment in Hong Kong was also hit by a handed down to a pro-democracy protestor under the city’s new security law, a visible measure of how thoroughly Beijing wants to assert its control over the territory.
3. Stocks set to open lower; Big Oil earnings and PCE data due
U.S. stock markets are set to open sharply lower later, with the declines in Amazon and Pinterest stock adding to disappointment at second-quarter growth figures published on Thursday.
By 6: 20 AM ET (1020 GMT), Nasdaq futures were down 1.1%, while were down 0.7 and were down 97 points, or 0.3%.
The early focus may be on the index for second-quarter , widely seen as the Federal Reserve’s preferred measure of inflation. The market will be anxious to avoid numbers that show inflation running ahead of expectations even as GDP growth undershoots them. The price index is expected to have risen 0.6% in June and accelerated to an annual rate of 3.7%, which would be its highest in nearly 30 years.
Also in focus will be Robinhood (NASDAQ:) stock after a weak debut on Thursday, and Procter & Gamble (NYSE:), whose CEO is stepping down. There will also be earnings from Exxon Mobil (NYSE:) and Chevron (NYSE:), Berkshire Hathaway (NYSE:), Caterpillar (NYSE:) and AbbVie (NYSE:), among others.
4. Eurozone’s spring reopening went better than expected
The Eurozone economy in the second quarter, as positive surprises in France, Spain and, especially, Italy offset a slight disappointment in Germany.
Eurostat said that grew 2% quarter-on-quarter, something that translates into higher annualized