KBC Market Research Desk
KBC Bank
European equities trade close to opening levels after recovering from initial weakness. Disappointing eco data pushed the Dax for a test of yesterday’s low, but a break didn’t occur. US equities open marginally higher. Stronger earnings (JP Morgan, Johnson & Johnson, Citigroup) seem to be able to (temporary?) stop the selling pressure.
The German 10‐year yield dropped to a new record low today following another batch of poor economic data from Europe and sharply lower than expected inflation data in the UK and Sweden.
The German Economy Ministry slashed its growth forecasts for this year to 1.2%, sharply down from 1.8% in April and also lowered growth expectations for next year to 1.3% (from 2%). The Ministry said that geopolitical crises increased uncertainty in Germany and moderate growth is weighing on the German economy.
Euro zone industrial production dropped more than expected in August, by 1.8% M/M, mainly due to awful German output, while also in other countries production remained sluggish. The German ZEW indicator for October showed a further worsening in investor morale, to the lowest level since end 2012.
The US earnings season came into full swing today with JP Morgan Chase and Citigroup the eye‐catchers. JP Morgan narrowly missed expectations for the third quarter, while Citigroup reported stronger profits, helped by better than expected trading results.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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