China

China's frail growth could weigh on companies with exposure to the world's second-largest economy, including Apple, big chipmakers and luxury retailers as they report quarterly results in the next few weeks, Reuters reported. Wall Street is bracing for a steep drop in second-quarter U.S. earnings, with profit margins expected to be hurt by U.S. inflation and weaker spending. Both U.S. and European companies with exposure to China could be hit by that economy's sluggish growth as its post-COVID momentum has faltered rapidly.

China's central bank is expected to leave key interest rates on hold on Thursday, but the pressure to ease is growing almost by the day, Reuters reported. Japanese trade, Australian unemployment and Hong Kong inflation data top the regional economic calendar on Thursday, and investors will be hoping the continuing corporate earnings-fueled gains on Wall Street will drive local risk appetite. The Dow Jones Industrials is now up eight days in a row for the first time since September 2019. It last posted a nine-day winning streak in September 2017. Sentiment was again positive during the U.S.

Whatever is driving Wall Street higher — the finishing line of the Fed's rate-hiking cycle, a falling dollar or strong earnings — it is not really filtering through to Asian markets, Reuters reported. The disconnect between Asia and the rest of the world has widened recently, and correlations between the MSCI Asia ex-Japan index and leading U.S. and global indexes are the weakest in about a month. A solid batch of second quarter earnings from some of the largest U.S. banks and financial firms on Tuesday kept the U.S. stock market juggernaut rolling.

China's economy grew at a frail pace in the second quarter as demand weakened at home and abroad, with the post-COVID momentum faltering rapidly and raising pressure on policymakers to deliver more stimulus to shore up activity, Reuters reported. Chinese authorities face a daunting task in trying to keep the economic recovery on track and putting a lid on unemployment, as any aggressive stimulus could fuel debt risks and structural distortions.

Word that Uruguay was seeking a trade deal with China prompted exultation at El Álamo ranch, a lush expanse of grass punctuated by cactus and herds of cattle on the eastern plains of Uruguay, the New York Times reported. Most of the cattle are destined for buyers in China, where they confront tariffs of 12 percent — more than double the rate applied to meat from Australia, the largest exporter of beef to China. Ranchers in New Zealand, the second-largest exporter, enjoy duty-free access to China.