Even though Chinese growth data was bad and the political situation in Italy was uncertain, European stock markets went up on Friday. This was a good way to end a tough week.
By 4:15 a.m. ET (8:15 a.m. GMT), the DAX in Germany was up 1.3%, the CAC 40 in France was up 0.5%, and the FTSE 100 in the UK was up 0.8%.
The main European indices went up on Friday. This was helped by the fact that people don’t expect the Federal Reserve to raise rates by 100 basis points later this month. St. Louis Fed President James Bullard and Fed Governor Christopher Waller, both known as “hawks,” both said they wanted another 75 basis point hike this month, even though inflation numbers on Wednesday were very high.
A sharp rise in U.S. interest rates could put the U.S. economy, which is the main driver of growth around the world, into a recession.
Italian President Sergio Mattarella’s decision to reject Prime Minister Mario Draghi’s resignation after he lost the support of one of the country’s biggest political parties from his broad coalition government has also helped set the tone.
Fears of a global economic slowdown have been weighing on stock markets for most of this week. China’s economy shrank sharply in the second quarter, which came out early Friday as more proof of this. Its GDP fell 2.6% from the previous quarter, compared to a revised gain of 1.4% in the previous quarter. This shows how widespread COVID lockdowns have hurt the world’s second-largest economy.
In business news, Aston Martin (LON:AML) stock went up by more than 15% after the luxury car maker announced a £653 million ($772 million) funding package in which Saudi Arabia’s Public Investment Fund will become its second-largest shareholder.
Burberry (LON:BRBY) stock dropped 7.2% after the British fashion company said that sales in China, a key market, dropped by 35% in the first quarter.
Fevertree (LON:FEVR) stock fell by more than 28% after the company that makes high-end drink mixers said its margins could be hurt by “significantly” worsening logistics and costs.
The stock of Dutch navigation and digital mapping company TomTom (AS:TOM2) went up 8.4% after the company confirmed its revenue forecast for 2022, even though supply chains were tight.
Oil prices went down on Friday and are still on track to end the week below $100 a barrel for the first time since early April. This is because the Chinese growth data made people worried about a slowdown in the world economy.
On Friday night, U.S. Vice President Joe Biden will fly to Saudi Arabia to try to get his Gulf allies to pump more oil and bring prices down. But he might not be able to do this because most of the members of the Organization of the Petroleum Exporting Countries don’t have much spare capacity left.
By 4:15 AM ET, U.S. crude futures were down 0.7% to $95.12 a barrel, which was down over 9% for the week. The Brent contract went up 0.3% to $98.82, which was down over 7% for the week.
Also, gold futures went down by 0.3% to $1,700.35/oz, while EUR/USD went up by 0.1% to 1.0026.
