Europe stocks traded lower on Wednesday after data showing the Continent’s largest economy contracted and eurozone industrial production declined.
After halting a two-day losing run on Tuesday, the Stoxx Europe 600 SXXP, -1.01% declined 0.46% to 370.69, with banks including UniCredit UCG, -3.13% and Danske Bank DANSKE, -2.86% lower.
The U.K. FTSE 100 UKX, -0.82% declined 0.33% to 7227.23, the German DAX DAX, -1.54% declined 0.79% to 11657.3 and the French CAC 40 PX1, -1.31% weakened 0.72% to 5324.23.
U.S. stock futures ES00, -0.92% pointed to a decline for the Dow Jones Industrial Average DJIA, +1.44% at the open, as the 2- and 10-year Treasurys briefly inverted.
What’s moving markets
The state of the global economy returned to focus a day after relief from the U.S. government delaying tariffs on Chinese consumer products.
Germany’s economy shrank by 0.1% in the second quarter, according to data released by Destatis, the statistics agency.
“The external backdrop is set to remain challenging due to persistent weakness in global demand amid re-escalated U.S.-China trade tensions and the increased likelihood of a no-deal Brexit,” said Iaroslav Shelepko, an economist at Barclays. “ Given varied risks, a gloomy global trade outlook and elevated uncertainty, we expect the economy to post another mild decline in the third quarter and therefore enter a technical recession even before Brexit and U.S.-E.U. trade risks are due to crystallize.”
The economy in the eurozone as a whole rose 0.2%, Eurostat reported, with Spain’s economy rising 0.5%, France’s economy improving by 0.2% and Italy’s economy staying flat.
Perhaps more concerning to markets was the 1.6% downturn in eurozone industrial production in June, as well as the softest Chinese industrial production growth in 17 years.
Focus stocks
Schindler Holding SCHP, -3.53% fell 4% as the elevator maker said markets may “slightly weaken over the remainder of the year” alongside a 2.8% decline in first-half operating profit. Its guidance for an annual net profit between 900 million and 940 million francs compares to consensus around 970 million francs. Rival ThyssenKrupp TKA, -3.86% fell 3.4%.
Straumann Holding STMN, +2.89% shares rose 3.3% as first-half earnings for the dental implant maker came in ahead of forecast and its sales guidance was upgraded.
Admiral Group ADM, +3.05% shares advanced 4% as the British insurer reported a 4% rise in first-half pretax profit and an increase in its dividend.
Drugmaker Sanofi SAN, +1.64% saw its shares rise 2% as UBS upgraded the company to buy from neutral, saying the pipeline of drugs “looks lackluster” but isn’t empty, and that it’s underperformed rivals like Novartis NVS, +0.02% , Roche ROG, -0.71% and Johnson & Johnson JNJ, +1.13% .
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