EUROPE MARKETS: Europe Stocks Trade Lower As German Economy Heads Toward Recession
By Steve Goldstein, MarketWatch
Europe stocks traded lower on Wednesday after data showing the
Continent's largest economy contracted and eurozone industrial
After halting a two-day losing run on Tuesday, the Stoxx Europe
600 dumbled 1.66% to 366.21, with banks including UniCredit
(UCG.MI) and Danske Bank (DANSKE.KO) lower.
The U.K. FTSE 100 slumped 1.41% to 7148.3, the German DAX
skidded 2.1% to 11503.37 and the French CAC 40 tumbled 1.97% to
U.S. stocks were hammered at the open, as the 2- and 10-year
Treasurys briefly inverted, which historically has been a predictor
of U.S. recessions.
What's moving markets
The state of the global economy returned to focus a day after
relief from the U.S. government delaying tariffs on Chinese
Germany's economy shrank by 0.1% in the second quarter
according to data released by Destatis, the statistics agency.
"The external backdrop is set to remain challenging due to
persistent weakness in global demand amid re-escalated U.S.-China
trade tensions and the increased likelihood of a no-deal Brexit,"
said Iaroslav Shelepko, an economist at Barclays. "Given varied
risks, a gloomy global trade outlook and elevated uncertainty, we
expect the economy to post another mild decline in the third
quarter and therefore enter a technical recession even before
Brexit and U.S.-E.U. trade risks are due to crystallize."
The economy in the eurozone as a whole rose 0.2%, Eurostat
reported, with Spain's economy rising 0.5%, France's economy
improving by 0.2% and Italy's economy staying flat.
Perhaps more concerning to markets was the 1.6% downturn in
eurozone industrial production in June, as well as the softest
Chinese industrial production growth in 17 years.
Schindler Holding fell 6.8% as the elevator maker said markets
may "slightly weaken over the remainder of the year" alongside a
2.8% decline in first-half operating profit. Its guidance for an
annual net profit between 900 million and 940 million francs
compares to consensus around 970 million francs. Rival ThyssenKrupp
(TKA.XE) fell 5%.
Admiral Group (ADM.LN) shares advanced 4.6% as the British
insurer reported a 4% rise in first-half pretax profit and an
increase in its dividend.
Sports Direct (SPD.LN) tumbled 10% after announcing that its
auditor, Grant Thornton, will step down on Sept. 11, when the
troubled sporting-goods retailer holds its annual shareholder
meeting. The Financial Times reported the retailer is in
discussions with the U.K. government over its auditor difficulties,
since no other accountant has so far been willing to step in.
(END) Dow Jones Newswires
August 14, 2019 10:05 ET (14:05 GMT)
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