Global Stocks Pressured by Weak Data, Tariff Threat

Date : 10/03/2019 @ 11:52AM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7167.95  -43.69 (-0.61%) @ 4:35PM
FTSE 100 share price Chart

Global Stocks Pressured by Weak Data, Tariff Threat

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1 Month : From Sep 2019 to Oct 2019

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By Avantika Chilkoti 

-- U.S. stock futures rise

-- Asian stocks drop, European shares flat

-- Oil prices dip

Global stocks wavered Thursday as expectations of fresh U.S. tariffs on European Union exports added to investor concerns about world economic growth.

In the U.S., futures for the S&P 500 gained 0.4%.

The Stoxx Europe 600 was flat in late morning trade, after suffering its worst performance this year on Wednesday. In Asia, Japan's Nikkei was down 2% and Hong Kong's Hang Seng closed up 0.3%. Stock markets in China and South Korea were closed on Thursday.

U.K. stocks were a weak spot in the region, with London's FTSE 100 down 0.5% and the FTSE 250 down 0.4% after a weak reading on the country's services sector and amid fresh Brexit tensions.

The U.K. services purchasing managers index on Thursday hit a six-month low of 49.5, below the 50 level that marks contraction. The new figures reignited concerns that the economy is in recession, analysts at Capital Economics said in a note, adding that economic performance will remain "well below par" while Brexit negotiations drag on.

Meanwhile, European officials gave a cool response to British Prime Minister Boris Johnson's new proposals to break the deadlock over Brexit just weeks ahead of the U.K.'s scheduled exit from the European Union.

Fresh data also added to the gloomy outlook for the broader European economy. The IHS Markit composite purchasing managers index fell to 50.1 in September from 51.9 in August, the lowest reading since June 2013.

Still, new figures from Eurostat showed retail sales in the euro area were up 0.3% over the month of August, following a 0.5% drop in July.

Investors were also still digesting news that the U.S. will impose new tariffs on EU goods, including jetliners Irish and Scotch whiskies, cheeses and hand tools, starting later this month.

"The total size or volume of tariffs being applied to what does amount to quite an array of goods is actually very small when you consider just the goods trade between the U.S. and the European Union," said Matt Cairns, rates strategist at Rabobank.

Shares in Airbus were up 3.2% on Thursday, while Pernod Ricard gained 3% and Rémy Cointreau was up 5%.

Among the biggest gainers in Europe was fashion retailer Hennes & Mauritz. Its shares gained 6.4% after the company reported its third-quarter earnings, which showed a 6% rise in net sales with a reduction in markdowns helping operating profits.

The yield on U.S. 10-year Treasurys dropped to 1.577% on Thursday, from 1.594% on Wednesday. Bond yields and prices move in opposite directions.

The WSJ Dollar Index, which measures the currency against a basket of its peers, was flat.

"The economy is fine without further escalation of the trade war, but what does an investor really have in terms of the next step in trade wars?" said Emiel van den Heiligenberg, head of asset allocation at Legal and General Investment Management. "No one can really predict what Trump will do next and that makes investors nervous."

Among the biggest gainers in Europe was fashion retailer Hennes & Mauritz. Its shares gained 6.6% after the company reported its third-quarter earnings, which showed a 6% rise in net sales with a reduction in markdowns helping operating profits.

In commodities, global oil benchmark Brent crude dropped 0.2% to $57.55 per barrel. Gold dropped 0.1%.

Later Thursday, investors will be watching for data on U.S. services activity in September, as well as August factory orders, for clues about growth in the world's largest economy.

Joanne Chiu contributed to this article.

Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com

 

(END) Dow Jones Newswires

October 03, 2019 06:37 ET (10:37 GMT)

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