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China worries the markets By Reuters


©Reuters. FILE PHOTO: An electronic blackboard displays stock indexes in the Lujiazui financial district in Shanghai, China, March 21, 2023. REUTERS/Aly Song/File Photo

A look at the future of European and global markets from Ankur Banerjee

A day full of economic data awaits European markets after a troubled Asian session, in which investors returned to worries about China’s struggling real estate sector and the prospect of tougher security laws for Hong Kong.

The financial hub’s leader confirmed on Tuesday his intention to pass new national security laws soon to build on sweeping legislation Beijing imposed on the city in 2020.

Eurozone, France and Germany GDP for the fourth quarter will be the key economic data for the European session, while the results of alcohol producers Diageo (LON:), the maker of Johnnie Walker whisky, can give a better picture of discretionary spending.

On a macro level, the week will be instrumental in determining the outlook on interest rates and how companies are doing, with most companies reporting this week, including Microsoft (NASDAQ:), Alphabet (NASDAQ:), and AMD (NASDAQ:) later Tuesday.

While you are worried about the Chinese real estate market after the court-ordered liquidation of the troubled Chinese giant Evergrande (HK:) dragged Asian stocks lower, as futures indicate European stocks are set for a higher open, extending their rally this week.

The pan-European index will aim to rise further after hitting a new two-year high, achieving its best weekly performance in three months.

Geopolitical tensions have driven oil prices higher, while gold has seen safe haven bids, with investors nervous about escalating clashes in the Middle East.

The United States has vowed to take “all necessary actions” to defend American forces after a drone strike killed three American soldiers in Jordan.

White House National Security spokesman John Kirby (NYSE:) said Monday that the United States does not want a broader war with Iran or in the region, “but we have to do what we have to do.”

Iran has denied any role in the attacks.

In corporate news, Airbus stock could benefit from Boeing’s (NYSE:) continued troubles. The planemaker withdrew its request for a coveted exemption that would have allowed U.S. regulators to potentially speed up certification of its upcoming 737 MAX 7.

Elsewhere, billionaire Elon Musk said the first human patient received an implant from his brain chip startup Neuralink on Sunday and is recovering well.

Key developments that could affect markets on Tuesday:

Economic Events: Flash Q4 GDP data for Eurozone, France and Germany; Eurozone consumer confidence for January

Earnings: Diageo, Microsoft, Alphabet, AMD and Pfizer (NYSE:)

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