Markets fall, risks to global growth “mounting”

Markets fell on Monday.

The S&P 500 fell 0.1 percent, the STOXX Europe 600 fell 0.3 percent and the Shanghai Composite fell 0.6 percent.

With the US earnings season just started, Mark Luschini, chief investment strategist at Janney Montgomery Scott, noted that bank results so far “look pretty good” while retail sales numbers “appear decent”.

“Market should continue to focus on these positive fundamentals unless there’s any further eruption in trade news, which will usurp the fundamental news,” he said.

In contrast, Morgan Stanley thinks that even a strong earnings season will not break stocks out of their range.

In a report on Monday, Morgan Stanley analysts led by chief US equity strategist Michael Wilson wrote that while earnings should come in ahead of analyst forecasts, “we do not see it as a positive catalyst for the U.S. equity market” as future economic growth “is likely to fall significantly”.

Indeed, in its latest World Economic Outlook released on Monday, the International Monetary Fund said that global growth “is becoming less even, and risks to the outlook are mounting”.