European markets trade lower as investors digest gloomy German data; Sodexo down 2%

european-markets-trade-lower-as-investors-digest-gloomy-german-data;-sodexo-down-2%

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, February 17, 2022.

Reuters

European markets were lower Friday morning, tracking global uncertainty as investors chart the course for monetary policy and continue to digest corporate earnings reports.

Investor sentiment has been tepid since mid-week after minutes from the Federal Reserve’s July meeting showed policymakers would not consider pulling back on interest rate hikes until inflation came down substantially, despite a slight slowing in inflation that had offered some hope for a less aggressive tightening path.

On the data front, European investors will be digesting July’s U.K. retail sales and German producer prices on Friday.

Markets in Asia-Pacific were mixed on Friday, taking their cues from a muted Wall Street, where the S&P 500 is looking to grind out another positive week. Stock futures stateside were flat in early premarket trade on Friday.

German producer prices skyrocket

German producer prices saw their highest jump on record, according to official data out Friday.

“The outlook for the further development [of the economy] is currently noticeably gloomy,” the ministry said in its report. Read the full story here.

The German economy, Europe’s largest, stagnated in the second quarter.

Andreas Rentz / Staff / Getty Images

—Matt Clinch

Schroders: UK retail figures ‘very strong’ despite double-digit inflation

Azad Zangana, senior European economist at Schroders, discusses this morning’s U.K. retail figures and inflation, providing an outlook for consumer sentiment and consumer spending over the next 12 months.

UK consumer confidence tanks

New data released before the opening bell Friday showed that U.K. consumer confidence hit a new record low of -44 in August. Research firm GfK said its consumer confidence index fell by 3 points compared to the month before.

“The Overall Index Score dropped three points in August to -44, the lowest since records began in 1974. All measures fell, reflecting acute concerns as the cost-of-living soars. A sense of exasperation about the UK’s economy is the biggest driver of these findings,” Joe Staton, client strategy director at GfK, said.

—Matt Clinch

UK retail sales rise in July

British shoppers saw a slight boost in July with official figures Friday showing a 0.3% rise for retail sales.

“Sales volumes were 2.3% above their pre-coronavirus (COVID-19) February 2020 levels, but down over the past year,” the ONS added in its release.

People seen dining outdoors in Soho in London in September 2021. Since Covid restrictions were lifted in the U.K., people have flocked back to streets, shops and public spaces.

SOPA Images | LightRocket | Getty Images

—Matt Clinch

Sodexo shares dip

Shares of French food services company Sodexo were down 2% in early deals. Broker Jefferies released a new note Friday morning where it cut the stock to a “hold” from a “buy,” also slashing its price target to 88 euros form 91 euros.

—Matt Clinch

CNBC Pro: Veteran strategist David Roche shares his views on the market rally

U.S. markets have picked up from their mid-June lows in recent weeks, but strategist David Roche believes current support for the market is set to run out.

Speaking to CNBC earlier this week, Roche, head of research firm Independent Strategy, said he thought the rally was “probably 75% over now.”

Pro subscribers can read more here.

— Jenni Reid

CNBC Pro: Investment pro says ‘don’t be a hero’ in markets

Market veteran Nancy Tengler says talk of a new bull market is premature, as she names the “reliable” stocks she likes right now.

“I think this rally has been excellent,” Tengler, who is CEO and chief investment officer of Laffer Tengler Investments, told CNBC “Squawk Box Asia” last week. “But I don’t think we’re off and running in a new bull market.”

She named several tech stocks that she thinks are “more reliable growers” — companies with a proven track record of growing earnings and dividends.

Pro subscribers can read the story here.

— Zavier Ong

Here are the opening calls

Britain’s FTSE 100 is seen around 13 points lower at 7,529, Germany’s DAX is expected to slide around 20 points to 13,677 and France’s CAC 40 is set to slip by around 46 points to 6,511.

—Elliot Smith

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