The strong weekly performance in European markets stalled on Friday, with stocks on the continent backing away from two-week highs and the FTSE 100 pulling back from its highest in 2016. Data showing the slowest growth in China for seven years and doubts whether oil producers can agree on an output freeze this weekend in Doha are both good reason to take profits.
The Chinese data confounded some expectations that improved economic performance in February and March would offset the sharp slowdown seen during January. Nonetheless, the data throws off the idea of a hard landing in China and adds credibility to the government’s ability to stabilise the economy with fiscal stimulus. After the surge following the export numbers earlier in the week, it was a tall order to see strong gains off the back of an in-line GDP print.
The price of oil has gained ground in the past two weeks, but that has only just made up for declines in the prior two weeks, leaving it basically unchanged the month preceding the producer meeting in Doha.
Banks remain a point of focus, with RBS (LON:RBS) topping the FTSE leader board before Citigroup (NYSE:C) reports its Q1 earnings, in a week that has seen its peers report lower profits and Italy create a rescue fund.
Shares of Tesco (LON:TSCO) were amongst top risers on the FTSE 100 on a positive crossover from well received results from France’s Carrefour (PA:CARR). Carrefour saw revenues decline, but excluding currency effects and volatile petrol sales, revenues rose ahead of expectations led by sales outside of France, where sales were flat.
SABMiller (LON:SAB) was a top riser after AB InBev agreed to some concessions with South African regulators to get the merger passed.
Property stocks have become the epicentre of Brexit speculation outside of currency markets this week. The main theory being that any shortage of skilled immigrant workers will slow building and raise costs. While interest rates are low and there’s a shortage of housing, it’s hard to imagine a Brexit would be enough to bring on hard times for housebuilders.
US stocks look set for a lower start in line with global markets ahead of Citigroup’s quarterly results.
USA pre-opening levels
S&P 500: 4 points lower at 2,078
Dow Jones: 23 points lower at 17,903
Nasdaq 100: 11 points lower at 4,543
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