Following Thursday’s carnage – the Dow Jones ended the US session down an eye-popping 1860 points – Europe’s decline paused on Friday morning despite some godawful data out of the UK.
In April, the first full month under lockdown conditions, the UK economy saw a staggering 20.4% contraction – worse than the -18.6% forecast, and a rapid acceleration on the -5.8% seen in March. For the 3 month period to the end of April, GDP was at -10.4%.
Manufacturing production for April was down 24.3%, with industrial production falling 20.3%. Construction output, meanwhile, plunged a whopping 40.1%.
Yet the FTSE was measured in its response, trimming its losses to a handful of points after an initial 0.8% slide. Part of that will come from the fact those GDP numbers are shocking, but not necessarily surprising – investors have received repeat warnings over what to expect, as recent as Wednesday’s OECD forecasts.
The FTSE, and markets have a whole, have also already taken a hell of a beating this week. There may simply not be the appetite to send them any lower at the moment, regardless of what the day’s data says.
Suggesting that is the case, the Eurozone saw a similar performance after the bell, quickly reducing their morning losses. The DAX fell 0.2%, while the CAC actually rose by the same amount.
That the Dow Jones is aiming for a sharp rebound this afternoon is likely also helping. The futures have the index up 460 points come the opening bell on Wall Street – less than a quarter of what it lost on Thursday, but not an insignificant chunk of change either.
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