Thursday’s opening of European stock markets is predicted to be lower due to concerns about potential future Federal Reserve tightening as well as recent indications of slowing growth, both domestically and in China.
At 2:00 ET (06:00 GMT), there was a 0.3% down in the German DAX futures contract, a 0.3% decline in the French CAC 40 futures contract, and a 0.2% decline in the British FTSE 100 futures contract.
German manufacturing output continues to decline
The revised 1.4% decline in German industrial production from the previous month continued with a 0.8% monthly decline in July, exceeding the 0.5% decline predicted by statistics released earlier on Thursday.
This is further evidence, along with a number of other data releases, that the biggest economy in the eurozone and a key contributor to regional growth is faltering and on the verge of recession.
Later in the session, the most recent estimate of the growth of the eurozone in the second quarter is likely to be released. The gross domestic product number is predicted to indicate that the region increased by just 0.3% during the quarter, with an annual growth of 0.6%.
However, economic problems are not exclusive to Europe.
Data released on Thursday indicated that China’s exports and imports decreased in August, with exports down 8.8% year over year and imports declining 7.3%.
Even while the trade figures were better than anticipated, they nevertheless demonstrate how much pressure China’s industrial sector is still under, necessitating that officials concentrate on increasing domestic demand in order to support development.
The biggest corporations in Europe rely heavily on China, and their bottom lines are still negatively impacted by China’s sluggish recovery.
Concerns about US inflation weigh
On the other hand, worries about sticky inflation increased in response to stronger-than-expected U.S. service sector data that was announced on Wednesday.
The U.S. economy was spared a sharp downturn because investors had just come to terms with the notion that inflation was declining in the country, enabling the Federal Reserve to halt its cycle of rate hikes.
Before they go into blackout ahead of their meeting later this month, some Fed officials are scheduled to speak later on Thursday at a fintech conference hosted by the Philadelphia Fed.
Nestle enters the chocolate industry in Brazil
Back in Europe, the premium chocolate manufacturer Grupo CRM in Brazil is set to have a majority interest purchased by Swiss food giant Nestle (SIX: NESN), which made the announcement earlier on Thursday. The transaction is anticipated to be completed in 2024.
Nestle reported that Grupo CRM possesses over 1,000 chocolate boutiques operating under the Kopenhagen and Brasil Cacau brands, in addition to a robust and expanding web presence.
Weak Chinese trade data causes crude to decline
A further indication of slowing Chinese growth overshadowed another fall in U.S. stocks, indicating tightening supply and oil prices dipped on Thursday, retracing their steps from 10-month highs.
The dismal trade data indicates that China, the world’s second-biggest economy and the top importer of crude oil, may miss Beijing’s 5% annual growth objective.
The American Petroleum Institute, a trade group, released data late on Wednesday that indicated U.S. oil stocks decreased for a fourth consecutive week, falling by 5.5 million barrels in the week ending September 1.
The reading typically serves as a prelude to the Energy Information Administration’s inventory data, which is required later in the day.
The U.S. oil futures were 0.5% lower at $87.12 a barrel by 2:00 ET, while the Brent contract was down 0.5% to $90.19.
Furthermore, the price of gold futures dropped 0.1% to $1,941.40/oz, and the EUR/USD dipped 0.1% to 1.0719.
