Stocks Struggle Amid Barrage Of Dismal Econ Data, HK Violence As Germany Narrowly Avoids Recession
Global stocks and US equity futures eased further on Thursday as the latest dismal Chinese data missed across the board and showed further economic slowdown, with investment growth printing weakest since 1998...
... adding to worries about the global growth fallout from the U.S.-China trade war. U.S. futures were down 0.14%, following a record-high close on the S&P 500 on Wednesday. Futures bounced briefly after news that China customs have lifted restrictions on US poultry meat imports, with China's Global Times acknowledging saying the move comes "amid the continuation of tradetalks, paving the way for hundreds of millions of dollars worth US meat export to China"; the US exported $390MM worth of poultry to China in 2014 before the ban. Yes, million, not billion.
With earnings season ending, Cisco Systems tumbled in early trading after its quarterly sales forecast fell far short of projections, while WalMart surged after the company raised its full year outlook. Altice Europe NV beat earnings estimates, while Burberry Group Plc climbed after reporting six-month earnings that exceeded expectations.
The MSCI All-Country World index was down 0.14% after start of trading in Europe. European shares initially fell, but later rebounded after data showing the German economy just barely missed a recession, rising 0.1% in the third quarter, avoiding a contraction thanks to consumer spending, and beating expectations of a second consecutive contraction.
While a recession was averted, the news was hardly good as Germany grew at just half the pact of the overall eurozone as growth across the entire continent grinds to a halt.
“Obviously it’s better than expected, but actually I would argue is that it’s a hollow victory because in effect it makes a fiscal response less likely,” said Michael Hewson, chief markets analyst at CMC Markets in London. “I think if they’d gone into a technical recession, the pressure to loosen the purse strings so to speak would have been much much greater.”
In Asia, stocks fell after very poor economic data in China and Japan showed the trade war between Beijing and Washington was hitting growth in some of the world’s biggest economies. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3%, while Japan’s Nikkei index fell further, dropping 0.8%. Asian stocks slid for a second day, led by material producers, as China’s economy slowed further in October, with factory output, retail sales and investment all below estimates. Most markets in the region were down, with Japan leading declines. The Topix fell 0.9%, dragged down by Sony and Toyota Motor, as Japan’s economy slowed sharply in the third quarter amid shrinking exports. Q3 GDP in Japan printed at just 0.1% - the same as Germany - and missing estimates of 0.2%.
