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Stocks – Europe Weakens; Dufry Seeks to Cut Costs

imageStock Markets11 hours ago (Jul 10, 2020 03:56AM ET)

(C) Reuters.

By Peter Nurse – European stock markets weakened Friday, amid worries the global economic recovery might fade as coronavirus cases increase.

At 3:55 AM ET (0755 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France fell 0.3% and the U.K.’s FTSE index was down 0.3%.

French industrial production showed a strong rebound in May, data showed earlier Friday, climbing 19.6% from April, as lockdowns were eased and factories reopened.

This follows on from German and Spanish industrial production figures also bouncing earlier this week, posting a 7.8% and a 14.7% increase in May, respectively.

However, these are May figures, and the worry is that the resurgence of coronavirus cases around the world since then, particularly in the U.S., will put this nascent recovery at risk.

EU leaders are set to get together next week to discuss, among other things, the proposed 750 billion euro recovery fund for economies hit hardest by Covid-19.

There remain fundamental disagreements over key aspects, meaning the plan could still be watered down or fail.

The European Central Bank is also scheduled to meet next week, but little new is expected after the June meeting increased the size of its Pandemic Emergency Purchase Program.

“They have deserved it. After all the excitement since March, next week’s meeting should give the ECB some time to reflect and take stock. It will not be the moment to decide on any new action,” said analysts at ING, in a research note.

In corporate news, Dufry AG (SIX:DUFN) stock fell 5.8% after the Swiss duty free operator said it was cutting personnel expenses by 20% to 30% this year to combat the hit to sales caused by the pandemic. More positively, Carlsberg (OTC:CABGY) A/S A (CSE:CARLa) shares rose 4.7% after the brewer said it had seen signs of a sharp rebound in demand due to restocking at the end of the second quarter.

Fast fashion group (LON:BOOH) shares rose another 6.5% as the shock of revelations about its supply chain last weekend dissipated.

Oil prices weakened Friday, heading for a weekly decline after the steep losses seen during the previous session, as the International Energy Agency also warned that the continuing spread of the coronavirus could derail the recovery in demand.

Oil inventories also remain bloated, with the U.S. oil stocks rising by nearly 6 million barrels last week.

At 3:55 AM ET, U.S. crude futures traded 1.3% lower at $39.09 a barrel, on track for a weekly loss of around 3%. The international benchmark Brent contract fell 1.1% to $41.88, set to drop around 2%.

Elsewhere, gold futures rose 0.1% to $1,804.95/oz, while EUR/USD traded at 1.1279, largely flat on the day.

Stocks – Europe Weakens; Dufry Seeks to Cut Costs

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