\n\tBy Greg Peel<\/p>\n
\n\tThe Dow rose 19 points, or 0.1%, while the S&P gained 0.1% to 1682 and the Nasdaq<\/span> added 0.2%.<\/p>\n \n\tThere was much nervousness on Bridge Street yesterday ahead of the release of China’s June quarter GDP following downgrades to 2013 forecasts from various houses and generally pessimistic chatter. The market opened to the upside, but fell ahead of the release, fearing the worst.<\/p>\n \n\tWhether or not Beijing’s GDP numbers are in anyway accurate is by the by, with little else to use as a gauge<\/span>. Thus when the result came in at bang on expectation at 7.5% year on year growth there were sighs of relief. Bridge Street recovered to close relatively flat on the day.<\/p>\n \n\tThe accompanying data for the month of June were a mixed bag, but not too far off expectations either. Retail sales posted a heartening 13.3% (yoy<\/span>) gain, up from 12.9% in May and against 12.9% expectation. This figure is particularly important as Beijing tries to shift the Chinese economy to a greater consumer focus, and away from export reliance. Industrial production fell to 8.9% from 9.2% and missed a 9.1% forecast, while fixed asset investment fell to 20.1% from 20.9% and missed a 20.2% forecast. Unlike the June trade numbers released earlier this month, this data set was close enough to the mark.<\/p>\n \n\tAlso pleasing was a 6.3% increase in electricity consumption. Many economists look to electricity use as a more accurate proxy for Chinese growth viv<\/span> a vis<\/span> the largely cooked up GDP, although electricity numbers are also a bit rubbery. But economists were very worried when consumption fell in 2012 to 5.5% year on year growth and this year Beijing is expecting 9%. The June number is a step in the right direction.<\/p>\n \n\tThere was also a mixed bag of data on Wall Street overnight. June retail sales showed a 0.4% gain, well short of 0.9% expectation and pumped up by the higher cost of petrol. On the other hand, the Empire State manufacturing index showed an acceleration in New York State activity with a rise to 9.5 this month from 7.8 in June (zero neutral).<\/p>\n \n\tWith the US heavily reliant on consumption it is assumed weaker retail sales would encourage the Fed to hold off on QE tapering, implying the “Bernanke put” will ensure all economic data, good or bad, will be well received. Last night BA-Merrill Lynch upgraded its year-end S&P 500 to 1750 from 1600, albeit the index is already at 1680 and in blue sky. But it will all come down to earnings in the end, and to that end the upside surprises continued last night.<\/p>\n \n\tCitigroup beat forecasts to post a solid result and enjoy a 2% share price gain. Meanwhile Boeing (Dow), which had dragged down the indices on Friday night after a Dreamliner<\/span> fire, bounced 3.7% last night to recover some of the 5% fall. It appears the fire did not represent a return of the aircraft’s much troubling battery issue.<\/p>\n \n\tThe US dollar index crept higher last night by 0.1% to 83.05. The volatility that dominated US financial markets over the past couple of months on the yes\/no tapering debate seems to have abated now as markets accept that the Fed still intends to react to the data rather than a predetermined plan. The earnings season has provided Wall Street with something more tangible to focus on. The Australian stock market has also settled a little, but is much more susceptible to China fears, as is evident in the movement of the Aussie dollar since Friday. Having marked 89.99 on the Chinese finance minister’s 7% blooper, the currency has since recovered and is now up 0.4% from Friday’s close to US$0.9100.<\/p>\n \n\tGold is steady at US$1284.90\/oz and the US ten-year bond yield slipped 5 basis points to 2.55%.<\/p>\n \n\tLondon metal traders were not as relieved over yesterday’s Chinese data as other markets, with reports from the LME<\/span> suggesting 7.7% growth was expected when everyone else had pencilled<\/span> in 7.5%. The 7.5% result thus sent base metal prices slightly lower, and aluminium<\/span> was worst hit with a 1.5% fall. Copper fell 0.2%.<\/p>\n \n\tThe oil markets were looking for 7.5% nonetheless, and despite the impact a slowing China should have on energy demand, Brent rose US28c<\/span> to US$109.09\/bbl<\/span> and West Texas rose US43c<\/span> to US$106.38\/bbl<\/span>.<\/p>\n \n\tSpot iron ore rose US10c<\/span> to US$126.90\/t.<\/p>\n \n\tThe SPI<\/span> Overnight close up a relatively enthusiastic 18 points or 0.4%.<\/p>\n \n\tBridge Street will be on edge this morning for the release of the RBA<\/span> July minutes, given expectations have swung solidly towards an August rate cut. Rio Tinto ((RIO)) and Perseus<\/span> Mining ((PRU<\/span>)) will release quarterly production reports.<\/p>\n \n\tThe ZEW<\/span> survey is out in Europe tonight along with the eurozone<\/span> trade balance, while inflation, industrial production and housing sentiment numbers are due in the US.<\/p>\n \n\tOn the US earnings front, Johnson & Johnson (Dow), Coca-Cola ((Dow), Goldman Sachs and Yahoo step up to the plate. \n\tAll overnight and intraday prices, average prices, currency conversions and charts for stock indices, currencies, commodities, bonds, VIX<\/span> and more available in the FNArena<\/span> Cockpit. Click here<\/a>. (Subscribers can access prices in the Cockpit.)<\/em><\/p>\n \n\tAll paying members at FNArena<\/span> are being reminded they can set an email alert specifically for The Overnight Report. Go to Portfolio and Alerts in the Cockpit and tick the box in front of The Overnight Report. You will receive an email alert every time a new Overnight Report has been published on the website.<\/em><\/p>\n
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