Shares in Europe fell for a second day on Friday but were off the lows by mid-morning. The Euro Stoxx 50 fell as lows as 3,366, its lowest since October 22. After Thursday’s collapse to five week lows, UK stocks slipped again on Friday but are off the lows, stabilising around 6,140.
Bullish sentiment has been damaged from the sell-off yesterday, leaving most sectors lower. The worst performer yesterday, basic materials is outperforming today thanks to steadiness in oil and metal prices.
A report from the IEA suggested higher stockpiles would impact crude oil prices. The agency’s prediction maybe a little dated; higher stockpiles have already driven the price of US crude down by 18% in the last month. Instead, traders took a ‘glass half full’ approach to the IEA’s report, focusing on oil demand growing at its fastest pace in five years and the prediction of slower non-OPEC output in 2016.
The euro fell after German and Eurozone GDP growth slowed more than expected in the third quarter according to initial estimates. Germany's economy grew by 0.3% in the July-to-September period, down from 0.4% in the previous quarter. The main drag was foreign trade which was impacted by a stronger euro and lower demand for exports from emerging markets.
Security firm G4S (CO:G4S) was top faller on the FTSE 100 after a broker downgrade. G4S shares have underperformed the market, down 10% this year. With no big contracts to offset likely higher costs from a rise in the national minimum wage, the downtrend in G4S looks set to continue.
US stocks look set to open unchanged on Friday’s open as investors await the October retail sales to either confirm or oppose a December lift-off in interest rates.
If the quarterly results of retailers are anything to go by, US retail sales will have a lot of catching up to do at the start of Q4. Shares of Nordstrom and Fossil are expected to dive by 20% and 15% respectively after missing estimates. JC Penney (N:JCP) reports results on Friday.
Shares of Cisco are expected to open lower after the company beat estimates but issued weak guidance.
USA pre-opening levels
S&P 500: unchanged at 2,045
Dow Jones: 1 point higher at 17,449
Nasdaq 100: 6 points lower at 4,582
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