Oct 11 2024: European stock markets traded slightly down on Friday as investors processed underwhelming UK growth data, while looking ahead to key US bank earnings and an eagerly awaited Chinese fiscal policy update.
By 03:10 ET (07:10 GMT), Germany’s DAX was down 0.1%, France’s CAC 40 dipped 0.1%, and the UK’s FTSE 100 fell 0.4%.
UK Economy Back to Growth Data released earlier on Friday indicated that the UK’s economic output grew by 0.2% in August, matching expectations, after stagnation in the previous two months.
On an annual basis, the economy expanded by 1.0%, falling short of the 1.4% forecast by economists.
According to Capital Economics analysts, the data supports the outlook for a mild slowdown in GDP growth during the second half of the year, rather than a recession.
German Inflation Eases Germany’s inflation rate for September was confirmed at 1.8%, according to the federal statistics office, aligning with preliminary figures.
The European Central Bank is scheduled to meet next week and is expected to ease policy further, particularly as inflation in the Eurozone’s largest economy has dropped below its medium-term target.
Focus on Chinese Fiscal Policy Investors were also keenly watching news of China’s finance minister calling for a fiscal policy briefing on Saturday. Expectations are high for a stimulus package ranging between 2 trillion to 3 trillion yuan ($280-$420 billion), though there is lingering caution after this week’s earlier disappointing policy meeting.
As a key export market for many major European companies, China’s economic challenges, including sluggish consumer spending and a real estate crisis, remain in focus.
BP Shares Fall on Flat Output In the corporate sector, BP’s stock fell by nearly 1% after the energy company announced that its third-quarter output would be “broadly” flat, and net debt would likely increase by the end of the quarter.
However, much of the day’s attention is likely to shift to the US, where major banks like JPMorgan Chase, BNY Mellon, and Wells Fargo are set to report their quarterly earnings. These results traditionally signal the start of the US earnings season and will provide a barometer for a stock market near record highs.
Additionally, Tesla captured some headlines after unveiling its long-awaited Cybercab robotaxi, with CEO Elon Musk predicting production by 2026 at a price under $30,000.
Hurricane Milton and Oil Prices Oil prices climbed on Friday, heading for a second consecutive weekly gain as markets evaluated the impact of Hurricane Milton in the US and continued to monitor heightened tensions in the Middle East.
By 03:10 ET, Brent oil prices rose by 2.3% to $78.36 per barrel, while US crude futures (WTI) increased by 2.1% to $74.81 per barrel. Both benchmarks were on track for weekly gains of about 1%.
In the US, Hurricane Milton wreaked havoc across Florida, leaving millions without power and potentially curbing fuel consumption in the world’s largest oil producer and consumer. Meanwhile, traders remained alert to the possibility of rising tensions in the Middle East, particularly if Israel targets Iran’s oil infrastructure.
