Associated Press
- Stocks dropped on Friday as investors reacted to a shrinking UK economy, a decline in Germany manufacturing output, and a snap election in Italy.
- The UK economy shrunk by 0.2% in the second quarter, its first contraction since 2012.
- German exports plunged 8%, marking their steepest decline in three years, while imports slid 4.4%.
- Matteo Salvini — Italy’s deputy prime minister and head of the League party — called for an election, citing irreconcilable differences with coalition partners The Five Star Movement.
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Stocks dropped on Friday as investors reacted to a shrinking UK economy, a decline in Germany manufacturing output, and a snap election in Italy. China’s producer prices dropped, a sign of weakening industrial demand.
Also weighing on markets: The US government held off on allowing US companies to do business with Chinese tech giant Huawei, after Beijing said it was halting purchases of American agricultural products, according to Bloomberg.
The UK economy shrunk by 0.2% in the second quarter, its first contraction since 2012, the Office of National Statistics said.
German exports plunged 8%, marking their steepest decline in three years, while imports slid 4.4%. The data signaled further troubles for Europe’s industrial powerhouse, and fanned fears of a eurozone slowdown.
Meanwhile, Matteo Salvini — Italy’s deputy prime minister and head of the League party — called for an election, citing irreconcilable differences with coalition partners The Five Star Movement. Italian government bonds plunged.
"Italian political turmoil and German economic weakness are the two main weights on sentiment today," said Neil Wilson, chief market analyst for Markets.com.
Asian equities retreated as traders braced for more protests in Hong Kong. US futures slumped after the State Department labeled China a "thuggish regime" in response to its release of photos and personal details of a U.S. diplomat who met with student leaders in Hong Kong, according to Reuters.
"The recent flare-up in US-China tensions continues to weigh on the collective mind, as investors hunker down for what is feared to be a long, drawn-out dispute between the world’s two economic powerhouses," said Han Tan, market analyst at FXTM.
Here’s the market roundup as of 9:25 a.m. in London (4:25 a.m. EST):
- Asian markets dropped with China’s Shanghai Composite down 0.7%, the SZSE Component down 1.4%, and Hong Kong’s Hang Seng down 0.8%.
- European equities slid with Germany’s Dax down 0.5%, Britain’s FTSE 100 down 0.3%, and the Euro Stoxx 50 down 0.7%.
- US stocks are poised to open lower. Futures underlying the Dow Jones Industrial Average and the S&P 500 were down about 0.4%, and Nasdaq futures were down 0.7%.
- Oil prices climbed with West Texas Intermediate crude up 0.5% at $52.80 a barrel and Brent crude up 0.5% at $57.70.
- Gold rose 0.3% to $1,514, close to a six-year high.
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Source: Business Insider – tmohamed@businessinsider.com (Theron Mohamed)