By Peter Nurse
Investing.com - European stock markets are seen opening largely lower Friday, amid concerns about the global economic recovery as the coronavirus pandemic continues to weigh.
At 2:10 AM ET (0610 GMT), CAC 40 futures in France dropped 0.2%, the FTSE 100 futures contract in the U.K. fell 0.7%, while the DAX futures contract in Germany traded 0.1% higher,
U.S. stocks closed lower Thursday, weighed by employment and housing data which pointed to signs of a slowdown in the country’s economic recovery.
Data in Europe continued in the same vein Friday, as U.K. retail sales rose 0.8% on the month in August, slightly better than the 0.7% predicted, but still a sharp slowdown from the 3.7% growth seen in July.
Thus, while a rebound of sorts is also underway in Europe as lockdown restrictions have been eased and businesses reopened, France, Spain and the U.K. among others are grappling with a virus resurgence.
That is raising the very real possibility of renewed restrictions and lockdowns.
"A flaring in the number of Covid-19 infections over the summer months has made it very clear that if there is no effective vaccine, growth will be handicapped," said Peter Vanden Houte, chief economist at ING.
Globally, coronavirus cases have topped 30 million, according to data from Johns Hopkins University, with infections showing no signs of slowing more than six months after the pandemic was declared. The death toll is approaching 1 million, with the U.S. topping the list with almost 200,000 fatalities.
Investors are still fretting over the Federal Reserve’s decision not to add additional stimulus while Congress argues over a new relief bill and with the European Union’s 750 billion euro recovery fund only due to kick in next year.
In corporate news, Spain's Caixabank (MC:CABK) has announced the terms of the acquisition of state-owned lender Bankia (MC:BKIA) in deal that will create Spain's biggest domestic bank.
Continuing the takeover theme, buyout firm Apollo Global Management (NYSE:APO) is weighing up the acquisition of plastics manufacturer Covestro (DE:1COV) according to Bloomberg, while the London Stock Exchange (LON:LSE) is also chatting to Euronext (PA:ENX) over the possible sale of Borsa Italiana.
Oil prices climbed Friday, with the complex set for its best week since June on the back of strong words from Saudi Arabia about adherence to agreed production cuts and reduced U.S. stockpiles.
On Thursday, Saudi Arabia’s Prince Abdulaziz bin Salman was vocal in his criticism of OPEC+ members that have failed in their commitments to cut output levels.
That followed U.S. government data, released earlier in the week, showing a surprise draw in crude stockpiles last week, another boost to the market.
U.S. crude futures traded 0.8% higher at $41.28 a barrel, while the international benchmark Brent contract rose 0.7% to $43.58. Both benchmarks have seen gains of over 9% this week, the first positive week in three.
Elsewhere, gold futures rose 0.6% to $1,960.80/oz, while EUR/USD traded 0.1% higher at 1.1855.