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RETAIL WOES CONTINUE AS SECTOR HITS 2-YEAR LOW (0950 GMT)
The European retail index has dropped another 2.5% on Friday morning, hitting its lowest level since April 2020, when the emergence of COVID wreaked havoc on financial markets.
The sector has dropped for three consecutive trading sessions and is comfortably the worst performing in Europe this year as worsening consumer confidence, multi-decade high inflation and a cost-of-living crisis have sent shares tumbling.
All 11 components of the retail index are now underwater in 2022, with the sector down a whopping 34% year-to-date.
Germany's Zalando is the worst performer, having fallen by over 56% in 2022. This morning down another 6.5% as JPM and Credit Suisse both cut their target price for the shares.
British high street names haven't fared much better with JD Sports and Marks and Spencer both having dropped by around 42% this year.
Some grim retail data also came from Italy today:
-Italy retail sales fall 0.5% m/m in March
(Samuel Indyk with Julien Ponthus)
STOXX SLIPS TO LOWEST IN SEVEN WEEKS (0800 GMT)
The pan European index is down around 1% after touching its lowest level since mid March putting the index on track for its worst weekly drop in two months.
Recession fears are rising and concerns central banks will raise interest rates even higher to tame high inflation hit global equity market sentiment.
Travel and leisure, technology, real estate , personal and household goods are falling between 1% and 2%.
Earnings added to the gloom in Europe.
Adidas drops around 6% as it lowered expectations for 2022 sales as renewed COVID-related lockdowns in Greater China continue to hit the German sportswear company.
Ambu shares fall nearly 13% after the Danish medical equipment company has announced another guidance cut in its Q2 report citing macroeconomic headwinds, supply chain volatility, ongoing hospital labour shortages.
(Joice Alves)
SELL EVERYTHING (EXCEPT THE DOLLAR)! (0705 GMT)
When the blue-chip Dow Jones index slides more than 1,000 points on one day, U.S. Treasury yields jump as much as 20 basis points and Britain's pound drops more than 2%, you'd be forgiven for thinking that investors have gone into a sell everything mode.
But with the safe-haven dollar at 20-year highs, there was at least one asset benefiting from Thursday's market mayhem.
For sure, waters seem calmer as European trading gets underway, although Asia shares slumped overnight.
Having breathed a sigh of relief that the Federal Reserve didn't opt for a massive 75 bps rate hike at this week's meeting, in a change of mind investors fretted that aggressive rate hikes - like the 50 bps move the Fed delivered - could trigger a sharp economic slowdown or recession.
Adding to the volatility was a surge in U.S. real or inflation-adjusted bond yields, which rose to their highest since early 2020.
The Bank of England warning of recession risk and inflation rising above 10% only exacerbated concerns about the growth outlook, sparking the biggest one-day drop since March 2020 (and we all remember why that month stands out, right?)
Given that it's non-farm payrolls day in the United States, Friday's trading session may not bring a quiet end to the week.
Economists polled by Reuters predict the U.S. economy created a solid 391,000 new jobs in April, versus 431,000 a month earlier.
The unemployment rate is expected to fall to 3.5%, which would make a pre-pandemic low.
The jobs data, alongside next week's U.S. inflation data , should help frame the debate over the Fed policy outlook.
Key developments that should provide more direction to markets on Friday: - Tokyo consumer prices rise at fastest pace in 7 years - ECB must quickly raise key rates, says head of Germany's Ifo institute - - Swedish Central Bank minutes - Federal Reserve Bank of New York President John Williams - U.S. non-farm payrolls - Brazil April CPI - European earnings: Adidas, IAG, Amadeus, Intesa San Paulo, Beazley - U.S. earnings: CIGNA, Goodyear
(Dhara Ranasinghe)
STOXX 600 SET FOR WORST WEEK IN TWO MONTHS (0630 GMT)
Futures are pointing to a flat start of the day for European bourses after Asian shares hit their lowest in seven weeks.
The pan European STOXX 600 index is on track for its biggest weekly decline in two months as recession fears and concerns about rising interest rate, the Ukraine war, surging inflation and China's COVID lockdowns all have weighed on stock markets.
The Fed and the BOE both rose interest rates this week, in efforts to tackle persistent high inflation.
U.S. payroll data due later will help traders gauge how hot the global economy is running.
In the meantime, British Prime Minister Boris Johnson's Conservative Party lost control of traditional strongholds in London and suffered losses elsewhere in local elections.
(Joice Alves)
