Morning Brief: China's economy loses steam

Tuesday, May 15, 2018

What to watch today

Photos/REUTERS/Lucy Nicholson

On Tuesday morning, the April report on retail sales will be released, with economists forecasting a 0.3% increase in sales over the prior month and a 0.4% increase when stripping out gas and car sales. Ian Shepherdson at Pantheon Macroeconomics, however, expects that retail sales will show no growth over the prior month, citing auto sales as a likely drag on the headline number with a 0.2% increase in consumption when stripping out these numbers.

Manufacturing activity in New York state and a reading on homebuilder sentiment in May will fill out the economic data schedule on Tuesday.

Home Depot (HD) announced Q1 earnings of $2.08 per share, which was stronger than the $2.06 expected by analysts. However, revenue came up short, coming in at $24.95 billion compared to expectations for $25.21 billion. Comparable store sales were up 4.2% during the period.

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Top news

China’s soft April data suggest economy losing steam: China reported weaker-than-expected investment and retail sales in April and a drop in home sales, clouding its economic outlook even as policymakers try to navigate debt risks and defuse a heated trade row with the United States. Fixed asset investment grew the slowest since 1999 while the pace of retail sales softened to a four-month low, suggesting a long-anticipated slowdown in the world’s second-largest economy may finally be setting in even as protectionism is on the rise. [Reuters]

Supreme Court strikes down sports betting ban: What happens next:  On Monday, the Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA), the 1992 federal law that banned sports betting basically everywhere in America other than Nevada. This does not mean sports betting is now legal at a national, federal level. It means New Jersey can legalize and regulate sports betting, and collect taxes on bets. [Yahoo Finance]

MSCI lists 234 Chinese stocks for index inclusion in boost to capital markets: The U.S. index publisher, said on Tuesday it will include 234 Chinese large cap stocks in its global and regional indexes on June 1, setting the stage for capital markets in the world’s second-biggest economy to get a boost from a potential surge of foreign money. [Reuters]

Goldman shakes up leadership in trading unit: Goldman Sachs Group Inc. (GS) is shaking up the leadership of its powerful trading arm, which was once the envy of Wall Street but has struggled in recent years. Pablo Salame and Isabelle Ealet, two of three executives who oversee the division, will leave the firm next month, according to an internal memo reviewed by The Wall Street Journal. [WSJ]

Amazon adopts new policy to promote board Inc. (AMZN) on Monday said it is adopting a new policy to promote diversity in its board of directors, saying that women and minorities are to be among the company’s board nominees. [Reuters]

For more of the latest news, go to Yahoo Finance

A giant panda enjoys a shower to cool off the heat at Beijing Zoo on May 14, 2018 in Beijing, China. Zookeeper gave showers to giant panda as the temperature reached 34 degrees Celsius on Monday in Beijing. (Photo by VCG/VCG via Getty Images)

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