Morning Bid: Buoyant US eyes French angst, China home woes

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Wall Street stocks and bonds maintained stability following a dynamic macroeconomic week, despite concerns over French political instability and a worsening Chinese housing market crisis. Goldman Sachs raised its S&P 500 year-end target due to robust tech earnings, while U.S.

Treasury yields dipped and the dollar surged. Investor anxiety stems from French President Macron’s decision to call snap parliamentary elections, causing French bonds and stocks to tumble.

Political uncertainties in France have led to a significant widening of the French-German bond yield spread and a downturn in the CAC40 index. In contrast, European Central Bank’s Chief Economist Philip Lane downplayed the market upheaval, deeming it not yet disorderly. Meanwhile, Wall Street’s performance remained resilient, supported by stronger earnings projections.

In Asia, China’s economic indicators presented a mixed outlook with retail sales exceeding expectations but industrial production lagging. Persistent deflationary trends and declining home prices intensified concerns about the Chinese property sector. Japanese markets also faced declines, driven by economic growth worries and ongoing issues within the automotive industry, particularly affecting Toyota.


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