It’s a sea of red across European stock markets this morning and the FTSE has declined more than 1.2%. Concerns about global trade played a part but in the UK weak GDP numbers added an additional layer of pressure.
As the country gets ready to go to the polls later this week the economy is showing more signs of being drained by Brexit and an overall global slowdown with GDP growth in October rising at the slowest rate in six years. Other economic indicators did not make for much better reading: industrial production dropped 1.3% and construction output shrunk 2.1%.
All this bad news is feeding through into the corporate sector and is evidenced by some poor results on the board today. Ashtead (LON:AHT) shares plunged 7.7% after the firm said that the UK remains a tough operating environment (although it was more upbeat on the North American market) while Ted Baker (LON:TED) cut its earnings guidance and said the company’s CEO had resigned.
Oil drops below $60
In the wake of all the OPEC talks last week and the decision to deepen the existing production cuts rather than raise production, the oil market actually swung in the opposite direction. This morning Brent crude was trading down below $60 and though it is a touch higher since the market opened this is still about $3 below last week’s price. Clearly OPEC’s reassurance did not do much for the market, partially because the deeper cuts only formalized what is already happening in the market. Now with fears that a trade deal with China may not materialize until some point in 2020 oil prices are taking a full hit.