Asia Pacific Market: Stocks likely trade mixed on disappointing Chinese data, weak US lead

Asia Pacific share market expected to commence trading with back foot on Monday, 16 May 2016, due to weak finish of Wall Street on Friday and weaker than expected Chinese economic data.

China's investment, factory output and retail sales all grew more slowly than expected in April, adding to doubts about whether the world's second-largest economy is stabilizing. Growth in factory output cooled to 6% in April, the National Bureau of Statistics (NBS) said Saturday, disappointing analysts who expected it to rise 6.5% on an annual basis after an increase of 6.8% the prior month. Fixed-asset investment growth eased to 10.5% year on year in the January-April period, missing market expectations of 10.9%, and down from the first quarter's 10.7%. Fixed investment by private firms continued to slow, indicating private businesses remain skeptical of economic prospects. Investment by private firms rose 5.2% year on year in January-April, down from 5.7% growth in the first quarter.

Retail sales growth in April, which captures both private and government purchasing, rose 10.1% on an annual basis, slower than expected. Analysts had forecast sales would rise 10.5% on an annual basis, the same%age increase as reported for March.

It was upbeat March data that sparked hopes China's economy was picking up in a wake of a more than year-long blitz of fiscal, monetary and administrative stimulus measures. A recovering property market has also boosted demand for raw materials, giving a boost to long ailing heavy industries such as steel mills. But much of the data on April, which included weaker-than-expected exports and imports, plus soft factory activity surveys, continued to underline lingering weakness in the broader economy.

U.S stocks tumbled on Friday, 13 May 2016. The S&P 500 fell 17.62 points, or 0.9%, to close at 2,046.49, its lowest closing level since April 11. The Dow Jones Industrial Average fell 185.18 points, or 1.1%, to finish at 17,535.32. The Nasdaq Composite declined 19.66 points, or 0.4%, to close at 4,717.68.

The retail-sales data showed that sales at U.S. retailers jumped 1.3% in April to mark the biggest gain in a year. Meanwhile, consumer sentiment surged in early May as Americans' views of the future brightened. And U.S. producer prices rose 0.2% in April after two straight declines, but inflation at the wholesale level remained largely absent in the broader economy.

Investors were jittery thinking that Friday's data could bolster the Federal Reserve's case for raising interest rates twice this year. Indeed, on Friday, comments from Fed Chairwoman Janet Yellen were on the cautious side. In a letter to Rep. Brad Sherman (D., Calif.) released by his office on Thursday, she said the central bank wouldn't rule out using negative interest rates, but such a move would require careful consideration.

This week's crop of economic data manages to strike a pleasing balance between volume and importance. US data includes Fed minutes and CPI numbers. UK data also comes into focus, including CPI numbers and employment figures.

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