Major indexes started the day in the green and rose even higher after China reported better-than-expected trade data for March. While exports dropped 6.6% last month in US dollar terms, that was well above the 14% decline forecast in a Reuters poll of analysts. Imports dropped 0.9%, also far better than the 9.5% decline that analysts estimated.
The improving data indicates that China’s economy is returning to normal, according to analysts. But exports are likely still in trouble as the rest of the world contends with disruption caused by the virus, said Julian Evans-Pritchard, senior China economist for Capital Economics.
“Although supply-side disruptions to factory activity have now eased, foreign demand will slump this quarter as Covid-19 weighs on economic activity outside of China,” he wrote in a Tuesday research note.
Capital Economics analysts expect China’s GDP could plunge 16% in the first quarter compared to last year, one of the most severe estimates. China will report GDP on Friday.
US stocks slipped Monday, paring historic gains from last week’s rally, as investors prepare for those results and others out of corporate America. The Dow closed down 1.4%, or 329 points. The S&P 500 finished down 1% and the Nasdaq finished up 0.5%.