European stocks continue to crumble as the markets keep struggling to float above the waters and absorb possible recession fears.
A preliminary survey by S&P Global showed that French business activity for June was less than expectations. The disruptions to supply and inflation have affected French business, making its monthly readings weaker than expected.
The German composite PMI, which was at 54.8 in May dropped to 52.0. The figures dropped even lower than analysts’ prediction of 54.0. Also, France’s composite reading fell from 57.0 in May to 52.8. The wider euro zone also went from the 54.8 recorded in May to 51.9 in June. Analysts had forecasted 53.9. Global Industrial Lead for Accenture, Thomas Rinn, commented:
“Faced with challenges such as increasing material and energy costs, industrial companies in Europe continue to struggle with restricted revenues and operational challenges. Though there are signs of a recovery in order numbers, inflationary pressures look like they are here to stay, and European manufacturers should prepare accordingly.”
European Stocks Down with Investors Crippled Recession Fears
As of this morning, European stocks were lower, with the pan-European Stoxx 600 declining 05% by late mornings. Similarly, banks went down by 1.5%, and travel and leisure jumped 1.1%. German listed real estate company Aroundtown plunged over 7% to the lowest of the Central European Blue Chip Index. The real estate company recorded a fall after investment banking company JPMorgan (NYSE: JPM) cut its target price. JPMorgan also downgraded the company’s stock to “underweight.”
Meanwhile, French IT company Atos gained over 10% as French media hinted at a possible merger with Thales, supported by the government. Rinn added:
“Faced with challenges such as increasing material and energy costs, industrial companies in Europe continue to struggle with restricted revenues and operational challenges.”
Recession possibility and the ongoing inflation are choking European stocks and it does not appear this will end soon. US stock futures also went down earlier today, with major indexes at their lows. Investors worry about a possible inflation statement by Federal Reserve chair Jerome Powell. On Wednesday, Powell told Congress that a recession is a “possibility.” The Chair’s comment amounted to the fear already weighing on Wall Street. The Fed executive added that the Central Bank is working tirelessly to reduce inflation. Already, the inflation rate has peaked at a 40-year high in the US and the UK. Coinspeaker said yesterday that the consumer price index had reached 9.1% in the UK, the highest level since 1982.
No one knows for sure what the markets will say in the next few weeks and the coming months. Consumers are now paying more for electricity, gas, and co., investors are displeased with the market condition, and governments are seeking ways to control ongoing happenings.
Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.
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