China’s slip in factory activity growth rattles markets, as it comes at the same time most major giants report slower growth forecasts amid earnings season. China’s speedy recovery has been set as a standard example in financial economies for quicker recovery hopes. Hence a slowdown is quite concerning to markets.

China’s Caixin manufacturing purchasing managers index that acts as a leading indicator for manufacturing services declined to 50.3 VS 51.0 expected and 51.3 previously. In addition to the slower growth estimates, China’s regulatory crackdown has been pressuring investors in Asia-pacific markets. Especially after many shares lost hundreds of billions causing a sharp sell-off in Asian shares.  

Furthermore, Better-than-expected earnings for leading giants have been lifting stocks on Wall street however slower growth forecasts have been equally damaging to certain stocks including Amazon which has made its biggest percentage drop since the pandemics peak back in March 2020.

And on another note, Oil prices have also been affected by China’s regulatory regime including the resurgence of Covid-19 cases, leading to a cloudy fuel demand outlook. As result oil prices dropped. With both Brent and WTI almost slipping 1%. To levels of $74.62 and $72.77.  In addition to higher output concerns from OPEC+.

The delta variant is likely to keep dimming optimism for fuel demand in the near term. Especially with many countries re-applying lockdown measures. But there’s still hope that booster shots in the vaccine world will help levitate oil prices again and enhance fuel demand outlook till the end of the year.