Friday, February 8th, 2019

Global stocks tumble on weak eurozone outlook, US-China trade angst

Published 11:07 pm | February 08, 2019

Global stocks tumbled Thursday on a downgrade to Europe’s economic growth outlook and revived doubts on the US- China trade dispute.

“Yet more bad news reinforces the impression that the eurozone is headed
steadily into recession territory,” noted IG analyst Chris Beauchamp.

The EU Commission, the bloc’s executive arm, said it now expects growth of
1.3 percent in the eurozone this year, a significant cut from the 1.9 percent
it predicted only last November.

It said Europe is facing international headwinds — including Brexit
fears, Italian economic woes and the global trade war — which have now taken
the steam out of a post-crisis recovery in the eurozone.

Frankfurt’s DAX 30 index lost 2.7 percent following the announcement,
while the Paris CAC 40 index fell 1.8 percent.

London stocks, although also lower, outperformed their peers after the
Bank of England left interest rates unchanged.

The Bank of England slashed its forecast for UK growth this year to 1.2
percent from 1.7 percent, blaming the downgrade on a global economic slowdown
and “the fog of Brexit”.

Wall Street stocks, meanwhile, suffered their biggest losses in more than
two weeks after a top White House economist Larry Kudlow said in a broadcast
interview that there was still a “sizeable distance” between Washington and
Beijing in high-stakes trade talks.

President Donald Trump last week said he expected to meet with China’s
President Xi Jinping in person “in the near future” to seal a final trade
deal, but on Thursday, said the meeting would not take place before March 1
when tariffs were due to rise.

Trump’s remarks added “fuel to the fire,” William Lynch of Hinsdale
Associates told AFP, noting that corporate profits were not helping matters.

“We still have earnings season and some of the reports I saw earlier today
were not all that good, for the most part they missed earnings estimates,” he

Twitter plunged 9.8 percent after quarterly results showed a shrinking
global user base.

But SunTrust soared 10 percent and BB&T rose 3.9 percent after the
midsized banks announced plans for a $66 billion merger, creating the sixth-
largest US bank.

– Key figures around 2140 GMT –

New York – Dow: DOWN 0.9 percent at 25,169.53 (close)

New York – S&P 500: DOWN 0.9 percent at 2,706.05 (close)

New York – Nasdaq: DOWN 1.2 percent at 7,288.35 (close)

London – FTSE 100: DOWN 1.1 percent at 7,093.58 (close)

Frankfurt – DAX 30: DOWN 2.7 percent at 11,022.02 (close)

Paris – CAC 40: DOWN 1.8 percent at 4,985.56 (close)

EURO STOXX 50: DOWN 1.9 percent at 3,150.76 (close)

Tokyo – Nikkei 225: DOWN 0.6 percent at 20,751.28 (close)

Hong Kong – Hang Seng: Closed for a public holiday

Shanghai – Composite: Closed for a public holiday

Euro/dollar: DOWN at $1.1342 from $1.1362 at 2200 GMT Wednesday

Dollar/yen: DOWN at 109.83 yen from 109.97

Pound/dollar: UP at $1.2948 from $1.2932 at

Euro/pound: DOWN at 87.56 pence from 87.86 pence

Oil – Brent Crude: DOWN $1.06 at $61.63 per barrel

Oil – West Texas Intermediate: DOWN $1.37 at $52.64 per barrel.


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