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 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 cut its earnings guidance and said the company’s CEO had resigned.
Oil rallies post-OPEC
Brent crude is gaining ground in the wake of all the OPEC talks last week and the decision to deepen the cartel’s existing production cuts even though much of it has been only cosmetic. Oil has also managed to shrug off concerns that a trade deal with China may not materialize until some point in 2020. For the moment Brent crude is above $64/bbl and the next serious crunch point may come on 15 December, the day when the US needs to decide whether it will bring in new tariffs on China or only maintain the current ones.
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