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European Shares Falter as Traders Eye U.S. Jobs Data, OPEC+ Output Cut

Stock Markets Oct 06, 2022 03:39AM ET
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By Scott Kanowsky

Investing.com -- European shares edged lower on Thursday, paring back early gains, after stocks in the U.S. fell following fresh job market numbers and a deep output cut by the OPEC+ group of producer nations.

By 07:08 ET (11:08GMT), the pan-European STOXX 600 fell by 0.35%, the DAX in Germany traded 0.24% in the red, the CAC 40 in France inched down by 0.44%, and the U.K.'s FTSE 100 was 0.59% lower.

The Organization of Petroleum Exporting Countries and its allies, which include Russia, agreed on Wednesday to slash production by 2 million barrels a day in a bid to support flagging oil prices. However, worries remain that the decision could pour further fuel onto red-hot global inflation.

Oil prices have moved down after nearing a three-week high, with Brent Oil Futures for December falling 0.17% to $93.21. Crude Oil WTI Futures also dropped by 0.33%, trading at $87.48.

Stocks on Wall Street, as well as U.S. government bonds, fell in the wake of the OPEC+ announcement, halting a strong two-day rally seen earlier in the week. Also weighing on sentiment on Wall Street was new data showing resilient demand in the American labor market, which stoked concerns that the Federal Reserve will keep interest rates higher for a longer period of time.

Focus now turns to upcoming U.S. jobs data to help determine the path forward for monetary policy. Signs of labor market strength in Friday's key nonfarm payrolls report are expected to give the Fed impetus to continue aggressively tightening monetary policy, which would likely be a negative signal for risk-driven assets.

Meanwhile, fresh factory orders numbers out of Germany have led to additional concerns about the health of Europe's largest economy. Incoming orders in the country's crucial manufacturing sector slid by 2.4% between July and August, according to the Federal Statistics Office, due in part to the war in Ukraine and COVID-19 restrictions hitting supply chains. Analysts had expected a decline of 0.7%.

In corporate news, oil major Shell PLC (LON:SHEL) warned that third-quarter profits will be negatively impacted by a drop in refining margins and weak results from natural gas trading. Shares in Shell fell to near the bottom of the STOXX 600.

Merck KGaA (ETR:MRCG) also announced that it would start the process of looking into larger takeover deals in 2023. Shares in the German healthcare and chemicals group edged higher.

Elsewhere, gold futures rose by 0.20% to $1,724.20/oz, while EUR/USD exchanged hands at $0.9886.

European Shares Falter as Traders Eye U.S. Jobs Data, OPEC+ Output Cut
 

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Comments (1)
SquadW Name
SquadW Oct 06, 2022 4:54AM ET
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"On a lot of levels it’s worse now than in 2008. If 2008 was about Wall Street collapsing on itself, on all its conflicts of interests and lies, this one is more about Main Street. Main Street is broke. Main Street is taking all this inflation into their cost of living. Main Street has the highest credit-card interest going back to the 1990s. It’s way worse than 2008 on that basis. If you’re trying to pay your bills with credit, it’s getting worse and worse. And then they’re going to lose their jobs. Labor collapsing is always the last thing to go down. We’re right on the cusp of the labor cycle going the wrong way." Thank you.
jason xx
jason xx Oct 06, 2022 4:54AM ET
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Nonsensical maybe you are broke
cc cc
cc cc Oct 06, 2022 4:54AM ET
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not even close. 2008 affected main street even more. banks got hit with *** but main street was left with millions of overvalued houses (and mortgages) on which they defaulted, money markets turned negative affecting 100 of millions of customer around the world, all pension funds took hits and had to be refunded by main street. inflation hits hard, but in comparison it is a little drop in the ocean of 2008.
 
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