Investors in the mining sector will be pleased that Chinese GDP figures, along with industrial output and retail sales numbers, were of a fairly decent standard, since it has spared the beleaguered sector from a fresh bout of panic selling. Overall growth in China in Q3 was a respectable 6.9%, while strength in consumer spending will allay some fears about a slowdown. However, the figures will do nothing to dispel the idea that this particular growth bonanza has come to an end.
Big name mining stocks are in the red again this morning, with the sector at its lowest level in nearly two weeks. It looks increasingly like the bounce of early October was a false dawn, and barring some kind of sustained revival in risk appetite, perhaps via fresh monetary stimulus, the sector is heading lower once again.
Thankfully on this day of light data, we at least have some heavyweight US earnings to maintain interest. While earnings are expected to be a touch weaker, the bank’s strong margins put it ahead of its competitors, which may help the stock price to recover lost ground, having noticeably underperformed the sector year-to-date. Ahead of the open, we expect the Dow Jones to start at 17,197, down 18 points from Friday’s close.