Stock Groups

When the Dragon sneezes, Europe catches a cold By Reuters


© Reuters. FILE PHOTO – The European Central Bank headquarters is seen in Frankfurt (Germany), March 7, 2018. REUTERS/Ralph Orlowski/File Photo

A look at the day ahead from Danilo Masoni.

Markets around the globe are beginning to worry as China’s tech moguls and economic growth stagnate increase pressure. It’s Europe with its supercharged luxury stocks and export-oriented economy that will feel the greatest pain.

The index has fallen 1% so far in September, twice as much world stocks, and while Europe broadly is still in favour with investors and research analysts, the index has slipped all the way down to July lows.

Wall Street may see a rebound this morning due to Wall Street’s recent strength, but China is still in serious trouble.

China’s Number. Evergrande 2 is a property developer and has caused its shares to fall to decade levels, which in turn has driven Asian stock markets into their fourth day without a gain. Evergrande bonds cannot be traded. The Mid-Autumn Festival is a cloudy week due to virus outbreaks.

Europe Inc also faces problems internally. In response to rising power prices, Spain has decided to cap its energy costs and Italy stated on Thursday that they are planning “short term measures” to mitigate the rises in price. There are concerns that other countries could take similar steps — and at the cost of utilities firms.

The market is showing some support due to signs that U.S. inflation has peaked. Also, the largest economy in the world appears to be strong. The health of the biggest economy on earth will also be monitored by retailers later.

Graphic: Morning Bid –

Key developments that should provide more direction to markets on Thursday:

Japan’s hot exports growth cools as COVID-19 hits supply chains

Philip Morris (NYSE:) seals deal to buy UK’s Vectura with 75% stake tendered; French utility Veolia launches 2.5 bln euro capital increase[nL1N2QI0D1; Vivendi (OTC:) paves way for Lagardere takeover

German car registrations Aug

ECB Speakers: Christine Lagarde

Norges Bank Governor Oystein Olsen speaks

Egypt central bank meeting

U.S. weekly jobless claims/Philly Fed September

U.S. Retail sales/business inventories

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.