European stocks fall as sentiment deteriorates ahead of the US CPI
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Investors were cautious ahead of the release of significant U.S. inflation numbers later in the morning, and concerns about future growth weighed on European stock markets. At 3:50 a.m. ET (0750 GMT), the DAX in Germany was down 0.2 percent, the CAC 40 in France was down 0.8 percent, and the FTSE 100 in the United Kingdom was down 0.6 percent.
Investors are on edge Tuesday as the latest U.S. consumer prices are released at 8:30 a.m. ET (1230 a.m. GMT), as this is viewed as a significant component in determining when the Federal Reserve decides to reduce its economic stimulus. Annual inflation is estimated to have fallen slightly to 4.2 percent in September, down from 4.3 percent in July, and this report comes just ahead of the Federal Reserve’s next meeting on September 21-22.
Last week, the European Central Bank opted to scale back its emergency bond purchases in the fourth quarter, citing increased inflation, and ECB policymaker Isabel Schnabel warned on Monday that the region’s central bank is prepared to intervene if inflation does not moderate by the end of the year. In corporate news, Pandora (OTC: PANDY) stock jumped 3.5 percent after the jewelry company announced it aims to boost sales by 6.0 percent to 8.0 percent over the next few years.
The shares of BP (NYSE: BP) declined 0.3 percent after the energy giant announced that Dev Sanyal, its renewables chief, will retire at the end of the year, a surprise given BP’s efforts to build its renewables business and move away from oil. The stock of Ocado (LON: OCDO) dropped 2.7 percent after the online supermarket’s third-quarter earnings were hampered by greater costs related with recruiting additional drivers and a fire at its fulfilment facility.
Also worth noting is that the number of claimants in the United Kingdom declined by 58,600 in August, a significant improvement over the 7,800 drop the previous month, despite the fact that the unemployment rate remained at 4.6 percent. Crude prices rose on Tuesday, extending recent gains as another storm threatened output from the crucial Gulf of Mexico region in the United States, which is still recovering from the devastation wrought by Hurricane Ida only two weeks ago.
As Tropical Storm Nicholas intensified into a hurricane on Monday, the offshore oil platforms were evacuated, forcing President Joe Biden to proclaim a state of emergency for Louisiana. According to the Bureau of Safety and Environmental Enforcement, more than 40% of the US Gulf’s oil and gas output was still down even before Nicholas arrived.
By 3:50 a.m. ET, US crude futures were 0.8 percent higher at $71.03 per barrel, while Brent futures were 0.8 percent higher at $74.10. Both benchmarks were near their greatest levels since early August, which they had reached the day before. Furthermore, gold futures dipped 0.1 percent to $1,792.60/oz., while the EUR/USD rose 0.2 percent to 1.1827.