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The Friday Market Minute

  • Global stocks retreat as China GDP data underscores trade related risks in the world economy.
  • China Q3 GDP pegged at 6.0%, the weakest pace of growth since 1992, as trade tariffs, limp domestic demand and an uncertain policy response slow the world's second largest economy. 
  • European stocks open weaker as China data spooks markets, Renault sales forecast slams automakers.
  • Global oil prices dip following a bigger-than-expected build in U.S. inventories from the Energy Department as well as slowing exports from the world's biggest oil producer.
  • US equity futures suggest modest opening bell declines on Wall Street ahead of earnings from Coca-Cola, American Express, State Street and Kansas City Southern.

Market Snapshot

Global stocks retreated Friday after China posted its weakest quarterly economic growth rate in three decades, underscoring investor concern for a trade-related slowdown in major markets around the world and re-centering focus on the fate of ongoing trade talks between Washington and Beijing.

China's third quarter GDP growth rate was pegged at 6%, the country's statistics office said Friday, down from the 6.2% pace in the prior three month period and the slowest since the first quarter in 1992.

With slumping exports, halted manufacturing and eroding domestic demand, China faces significant headwinds in the coming months, irrespective of the outcome of trade negotiations with the United States, and may look to add further monetary and financial stimulus to avoid deterioration in the country's labor market, which the government has said in the past could be linked to social unrest.

The disappointing GDP data snuffed out a modest early rally in Asia markets, which had flowed through from Wall Street following a surprise breakthrough in Brexit talks between Britain and the European Union as well as some positive signals in the tech sector from earnings this week reported by chipmaker TSMC (TSM) - Get Free Report  and semiconductor supplier ASML (ASML) - Get Free Report .

U.S. equity futures look set for a modest moves at the opening bell, with contracts tied to the Dow Jones Industrial Average marked 38 points to the upside and those linked to the S&P 500 guiding to a 3 point pullback for the broader benchmark. 

European stocks opened weaker, as well, with the Stoxx 600 sliding 0.01% by mid-day , lead by weakness in the auto sector after French carmaker Renault SA (RNLSY)  cut its full-year sales forecast. Renault, which saw its CEO Thierry Bollore ousted last week amid the ashes of the Carlos Ghosn pay and fraud scandal, slumped more than 14% in Paris to trade at the weakest levels in at least six years.

Britain's FTSE 100, meanwhile, was marked 0.02% higher as the pound held its ground at 1.2895 against the U.S. dollar following yesterday's Brexit breakthrough, which saw Prime Minister Boris Johnson reach a deal with the European Union that could see Britain leave the bloc later this month - proving U.K. lawmakers approve the package during a special session in Parliament this Saturday.

Away from equities, the U.S. dollar index pulled back from two-and-a-half year highs this week to trade at 97.62 as the pound notched its best run of gains since 1985 and China's offshore yuan retreated as economic data deteriorated. Benchmark 10-year U.S. Treasury bonds, however, have barely moved, and were marked at 1.754% in early European trading. 

Global oil prices drifted lower, as well, after China's slowing data spooked markets and investors re-calibrated prices after data from the U.S. Energy Department yesterday showed a bigger-than-expected 9.3 million increase in domestic crude supplies last week, while exports over the past four weeks have fallen by nearly 1 million barrels from the same period last year. 

Brent crude contracts for December delivery were seen little-changed from Thursday's New York close to trade at $59.98 per barrel, putting the global benchmark for crude some 17% lower -- and within touching distance of bear market territory -- since hitting a multi-month peak of $71.95 in the wake of drone attacks on two key Saudi oil facilities.

WTI contracts for November delivery, which are more tightly linked with U.S. gasoline prices, were marked 20 cents higher at $54.13 per barrel, and have fallen 15.5% since the September 14 attacks on the Abqaiq and Khurais facilities in eastern Saudi Arabia.