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US Services Sector Contracts
On February 21, the US services sector took center stage. The S&P Global Services PMI unexpectedly dropped from 52.7 in January to 49.7 in February, signaling a sector contraction. Accounting for around 80% of US GDP, February’s data heightened fears of a sharp economic slowdown, triggering a flight to safety.
S&P Global Market Intelligence Chief Business Economist Chris Williamson emphasized the significance of the February survey, stating:
“Whereas the survey was indicating robust economic growth in excess of 2% late last year, the February survey signals a faltering of annualised GDP growth to just 0.6%.”
US Banks Turn Bullish on China Stocks
Despite ongoing uncertainty about a full-blown US-China trade war, US banks are bullish on Mainland China’s equity markets.
On Monday, February 24, CN Wire reported:
“Goldman Sachs remains overweight on China’s A shares and H shares. Developments in artificial intelligence will continue benefiting H shares from the fundamental and liquidity perspectives, the analysts say, and see room for A shares to catch up and narrow the return gap with H shares. H shares could continue being favored as global funds raise their allocation in China, they add.”
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