[Bloomberg](
China growth slows while outlook improves, Wall Street earnings kick off, and Iran deal on its last legs.Â
Slowing?
Chinaâs economy slowed to the weakest pace since quarterly data began in 1992, [rising 6.2%]( in the second quarter from a year earlier. There was better data beyond the headline number, with factory output and retail sales growth beating estimates for June. Those numbers helped stocks in Shanghai and Hong Kong [recover earlier losses](. There was also little sign of a slowdown in production of commodities in the country, with output of many basic materials [hitting records last month](.Â
EarningsÂ
Citigroup Inc. is the first big U.S. bank to report second-quarter earnings when it posts results [before the bell]( this morning. CFO Mark Mason warned last month that revenue from trading and investment banking [fees would fall](. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Wells Fargo & Co. are due to report tomorrow, with Bank of America Corp. on Wednesday, and Morgan Stanley on Thursday.
Saving Iran deal
European foreign ministers are meeting today in Brussels to discuss [Iranâs non-compliance with the 2015 nuclear deal](, and to try to find a way forward that will de-escalate the situation. The U.K.âs Mail on Sunday published further leaked diplomatic cables that showed President Donald Trump abandoned the nuclear pact with Iran because it was [signed by his predecessor Barack Obama](. Oil, which rallied last week on the back of increasing Iran tensions, as well as storm Barry in the Gulf of Mexico and falling U.S. stockpiles, is managing to [hold onto its gains this morning](.Â
Markets quiet
Overnight the MSCI Asia Pacific ex-Japan Index climbed 0.3% as investors welcomed the better news from China. Japan was closed for a holiday. In Europe, the Stoxx 600 Index was 0.1% lower at 5:50 a.m. Eastern Time in relatively subdued trading. S&P 500 futures [pointed to a small rise at the open](, the 10-year Treasury yield was at 2.125% and gold was slightly higher.Â
Sanctions
China hinted that it may [sanction firms]( such as General Dynamics Corp. and Honeywell International Inc. if a [$2 billion U.S. weapons sale]( to Taiwan goes ahead. Elsewhere, Russia and India have agreed on a method for payment of [multi-billion dollar defense deals]( that will avoid using the dollar in order to avoid U.S. sanctions on Russia. Finally, U.S. companies can [restart sales]( to Huawei Technologies Co. in two to four weeks, according to Reuters reports.Â
What we've been reading
This is what's caught our eye over the weekend.
- Odd Lots: Why a longtime bull [just flipped bearish]( on the stock market.Â
- Peter Thiel urges U.S. probe of Googleâs â[seemingly treasonous](â acts.
- Why Budweiser and banks [failed to sell]( the king of IPOs.
- Erdogan pledges to [lower Turkish rates]( after central bank fight.Â
- Tougher gun laws mean [fewer American kids die](.
- Bitcoin [tumbles](.
- Why everyone wants to go [back to the Moon](.Â
And finally, hereâs what Luke's interested in this morning
The defining feature of last weekâs cross-asset trade was the ability of U.S. equities to set fresh record highs in spite of â or perhaps because of â a brisk [sell-off in the safest government bonds](. Lower yields have been key to juicing stock valuations this year. So the tentative shift toward a âgood news is good newsâ backdrop on the heels of [solid data from the U.S.]( and [Europe]( would constitute a major change, if sustained. But itâs yet to be reinforced by results from Corporate America and their take on the possibility of a rebound in second-half growth that continues into 2020. On that note, Citi rates strategist Jabaz Mathai explains why thatâs important, and how it could serve as a limiting force against major upside in equities or downside in bonds: S&P 500 earnings estimates for 2020 have remained lofty even as current-year estimates come under the knife. âWhy do we care about this?â he writes. âSimply because it raises the probability of a de-rating in equities sometime in the second half of the year, and that in turn should provide a bid to USTs.â The narrowing of the spread between expected returns from stocks versus bonds (versions of the so-called Fed model or laymanâs equity risk premium) could creep to the fore this week amid the unofficial kickoff to the second-quarter reporting period and executivesâ thoughts about what the world will look like in a yearâs time.
Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close.
Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. [Learn more](.
[FOLLOW US [Facebook Share]]( [Twitter Share]( [SEND TO A FRIEND [Share with a friend]](
You received this message because you are subscribed to Bloomberg's Five Things newsletter.
[Unsubscribe]( | [Bloomberg.com]( | [Contact Us](
Bloomberg L.P. 731 Lexington, New York, NY, 10022