**Malaysia inflation comes in at 2.4% for June, at 16 month low**
Malaysia’s inflation rate for the month of June stood at 2.4%, marking its fourth consecutive month of decline and reaching its lowest point since April 2022 when it was recorded at 2.3%. The country has experienced a downward trend in inflation since August 2022, with eight months of decline and two months of stability. The statistics department of Malaysia attributed the June inflation to price increases in restaurants and hotels, as well as higher costs of food and non-alcoholic beverages.
**Wall Street cuts China’s GDP forecast multiple times this year**
International investment firms, including JPMorgan, have adjusted their GDP forecasts for China nearly every month in 2023. JPMorgan, in particular, has made six adjustments to its forecast since January, most recently lowering it to 5% in July from the previous 5.5%. Other banks such as Citi and Morgan Stanley have also reduced their China GDP forecasts to 5% this month. These frequent adjustments reflect the ongoing uncertainty surrounding China’s economic growth.
**Japan’s business activity expands for seventh consecutive month: au Jibun bank**
According to flash estimates by au Jibun bank, Japan’s business activity expanded for the seventh straight month. The composite purchasing managers index (PMI) remained unchanged at 52.1 for July compared to the previous month. However, services PMI slightly decreased to 53.9 from 54 in June, while manufacturing activity continued to contract with the PMI falling to 49.4 from 49.8. These figures indicate a mixed performance across different sectors of Japan’s economy.
**New Zealand trade balance slides in June as imports fall**
New Zealand experienced a narrowed trade surplus of only 9 million New Zealand dollars ($5.43 million) in June, compared to a revised figure of NZ$52 million in the previous month. On a year-on-year basis, goods exports rose by 1.3% to $6.31 billion in June, while imports fell by 14% to $6.3 billion. The rise in exports was mainly attributed to an increase in dairy products, while the fall in imports was largely caused by a decline in petroleum products.
**Bank of America expects Europe’s oil majors to ‘bottom out’**
Bank of America has stated that Europe’s major oil companies are close to reaching their lowest point and sees the start of the earnings season as a potential turning point. The bank has named its “Big Oil top pick” ahead of earnings and anticipates a 30% rise in its value over the next 12 months. This projection reflects the bank’s optimistic view of the oil sector.
**China’s earnings season and sector winners to watch**
Certain sectors in the Chinese stock market are experiencing favorable shifts in their fundamentals, according to HSBC. Profits are shifting towards industrials, consumer discretionary, and staples, while moving away from materials and energy. Furthermore, investors may receive insights into macro policy through the upcoming Politburo meeting, which is scheduled to take place before the end of the month. These developments present potential opportunities for investors.
**Australia’s business activity contracts for the first time since March**
Australia’s private sector witnessed a contraction in business activity, primarily driven by a decline in services activity. Juno Bank’s flash estimates revealed that the composite purchasing managers index fell to 48.3 in July, compared to 50.1 in June. Services PMI dipped below the 50 no-change mark to 48, while manufacturing activity displayed a softer contraction at 49.6, both indicating a contraction in the sector. A PMI reading below 50 represents a contraction.
**Credit Suisse warns of potential recession risks**
Credit Suisse’s global equity strategist, Andrew Garthwaite, has cautioned market participants about potential recession risks based on various market signals. Garthwaite noted that markets typically experience new lows during a recession, and indicators such as the yield curve, Senior Loans Officer Survey, and money supply suggest a heightened risk. He also expressed concerns about sticky wage growth potentially leading to higher core service inflation and limiting the scope for rate cuts unless a recession occurs.
**Earnings season opens with below-average performance**
The ongoing earnings season has so far reported slightly below-average results, according to FactSet. Approximately 75% of S&P 500 companies have reported positive earnings per share surprises, which is slightly below the five-year average of 77%. S&P 500 companies are also beating EPS estimates by 6.4% in aggregate, lower than the five-year average of 8.4%. Looking ahead, FactSet’s “blended” method predicts a 9.0% earnings decline for the S&P 500 in 2023, the largest decline since Q2 2020 due to the pandemic.
**Wall Street keeps a close eye on Mattel**
As the highly anticipated premiere of the movie based on the iconic Barbie doll approaches, Wall Street analysts are closely monitoring shares of toymaker Mattel. This milestone is crucial for Mattel to demonstrate its ability to transform its intellectual property into successful blockbusters. Additionally, analysts are observing other companies, including movie theaters and retailers, to gauge their performance in response to the film’s release.
**Regional bank stocks set to have best week in over two years**
Regional banks, represented by the SPDR S&P Regional Banking ETF (KRE), have been performing well this week, with the ETF increasing over 9% since Monday. This surge puts the KRE on track for its best week in more than two years. Western Alliance, PacWest, and Citizens Financial have experienced significant gains of roughly 25%, 24%, and 13%, respectively. The positive performance of regional bank stocks is indicative of the overall strength of the sector.