European stocks fell as investors gave a downbeat response to
Chinese economic data, though oil stocks gain as crude prices
Data out Monday showed China's economy grew 4.9% in the third
quarter from a year prior, a slowdown from the second quarter's
7.9% rate. Power shortages and supply-chain problems added to the
impact of Beijing's efforts to rein in its property and technology
The slower growth data are "a reminder that China is expected to
lose some of its momentum, but also how these global issues like
the energy crisis and supply chain issues will filter through to
global growth," said Edward Park, chief investment officer at U.K.
investment firm Brooks Macdonald. "There's just a bit of rebasing
of expectations for China and the rest of the world."
"We're in a mid-cycle slowdown," said David Chao, global market
strategist for the Asia Pacific ex-Japan region at Invesco, adding
that Chinese markets were in for continued uncertainty and
volatility in the near term. Still, he added: "Keep in mind the
government has many tools to propel the economy forward."
All eyes remain on inflation, with attention in Europe focused
on comments from Andrew Bailey over the weekend, after the Bank of
England governor said the central bank would act to curb
Inflationary fears were stoked by higher commodity prices, as
oil continued its apparently inexorable march higher.
Shares on the move: French banks' stocks have flown under the
radar recently, but investors should see this as an opportunity to
increase their exposure, as their returns potential makes them
attractive, Deutsche Bank analysts said.
The German bank expects Societe Generale, Credit Agricole and
BNP Paribas to signal higher payouts in their new mid-term targets
and calculates a dividend yield of 7%-8% for the three banks over
2021-23, excluding potential catch-up dividends.
This is a premium of about 40% over European banks, Deutsche
"In our view, consensus estimates reflect a conservative view on
shareholder payouts, given the ample capital buffers in place at
all French banks, coupled with a vastly improved profitability
outlook, and limited alternatives for the excess capital," it
Stock futures edged lower after data showed that China's
economic growth slowed sharply in the third quarter, and investors
weighed the risk to global growth from stickier-than-anticipated
inflation, supply-chain problems and heightened demand for
A strong start to earnings season has underpinned hopes that
companies can weather mounting challenges. Albertsons and State
Street are set to report quarterly results before the market
U.S. industrial production data for September, due at 9:15 a.m.
ET, is expected to show a seventh consecutive monthly increase. The
measure of output at factories, mines and utilities has been buoyed
by strong consumer demand for manufactured goods, though
supply-chain disruptions and a semiconductor shortage could curtail
auto production and drag down headline figures.
Investors have raised their expectations on the Fed lifting
interest rates following better-than-expected U.S. retail sales
data on Friday, and this should continue to support the dollar, ING
"The strong release prompted one of our preferred metrics of Fed
tightening expectations--the 1m USD overnight index swap priced
three years' forward--to jump to a new high for the year," ING
"This is a dollar positive, especially against low-yielding
currencies with dovish central banks and against energy importers,"
they said. The Dutch bank expects the DXY dollar index to remain
higher on Monday, trading in the range of 94.00 to 94.50.
The euro remains one of the preferred funding currencies as the
European Central Bank maintains a loose policy stance at a time
when other major central banks are looking to withdraw stimulus,
"Clearly, the ECB is on a very different chapter in the monetary
normalisation story than, for example, the Bank of England," ING
analysts said. "We favor EUR/USD pressing the lower end of its
1.1525-1.1625 trading range."
Bitcoin, the world's largest cryptocurrency by market value,
gained 4.1% from its 5 p.m. ET level Sunday to trade at $61,932.69.
The U.S.'s first bitcoin exchange-traded fund is expected to start
The different policy paths that the Bank of England and the
European Central Bank seem to be taking point to moderate strength
for the pound against the euro, said Commerzbank.
"If ECB and BOE deliver what their governors are promising--i.e.
rate hikes in the UK and at least a gradually expansionary monetary
policy on the Continent--,what will matter going forward is which
point of view seems more plausible over the coming months," said
Commerzbank's Ulrich Leuchtmann.
The longer the accelerated inflation level persists, the more
attractive the BOE's stance is likely to seem, he said.
The Turkish lira fell to a record low versus the dollar as the
country's central bank is expected to cut interest rates further at
Thursday's meeting despite elevated inflation.
The lira's recent slump is unlikely to prevent Turkey's central
bank from lowering its policy rate again on Thursday after last
month's 100 basis points cut, Commerzbank's Ulrich Leuchtmann
"The bank is no longer interested in the effects of its interest
rate policy on exchange rates, inflation and in the end the
stability of the Turkish economy." Ultimately the bank's decisions
are taken by President Recep Tayyip Erdogan, who wants lower rates,
European core government bonds sold off early Monday on what KBC
Bank attributes to the fact that high inflation readings continue
to weigh on sentiment. "Core bonds remain in sell-off mode this
morning as you can't look beyond the uncomfortably high inflation
stories," KBC said.
It added that European money markets continue to pull forward a
first interest rate rise by the ECB towards the end of 2022 or
U.K. borrowing costs rose Monday after Bank of England governor
Andrew Bailey said over the weekend that the central bank will
"have to act" to curb price pressures despite the uptick in
inflation likely being temporary.
The yield on the 10-year benchmark gilt rises almost four basis
points to 1.140% relative to Friday's close, according to
Bailey warned that higher energy prices means inflationary
pressures will last longer.
German Bunds seem torn between factors that drive yields in
opposite direction, said Commerzbank's rates strategists. Comments
from the ECB aiming to soothe fears of early tightening points to
lower Bund yields, while bearish lift-off adjustments in the US and
the U.K. push Bund yields higher.
"The coming days should show whether the bullish correction in
European markets has scope to resume," said Commerzbank's rates
They added that a further acceleration of ECB rate hike
expectations would risk undermining the credibility of the ECB's
forward guidance which would probably trigger verbal
Weaker-than-expected Chinese gross domestic product data
released this morning are weighing on market sentiment, primarily
challenging European cyclicals and highly volatile corporate
credit, said UniCredit.
"Within European corporate credit, Automobiles & Parts and
Basic Resources may face headwinds, given their substantial
exposure to China, " analysts at the bank sais, adding that
technical support from moderate new-bond euro supply coupled with
bond purchases by the ECB should limit the downside pressure.
Given their improved metrics and appealing returns versus the
cost of funding, the Italian bank said it sticks to its
recommendation to hold a bigger allocation to both sectors than the
benchmark at this stage.
Brent crude oil rose with prices having begun their rise during
Asian trading hours with coal prices rising there too. That
suggests the Asian power crunch is back on investors' minds, said
OANDA's Jeffrey Hally.
"With no signs of the China energy crunch alleviating soon, and
with the rest of Northern Asia and Europe competing for scarce
energy supplies, particularly gas, the price environment for oil
remains constructive," he added.
European benchmark gas prices were down 2.5% at EUR91.31 per
megawatt hour, after slipping on Friday in a move that "suggests
the market has started to price in an expected normalization of
Russian flows," said Goldman Sachs's Samantha Dart.
Copper prices rose to their highest level in five months as
stockpiles dwindled and the energy crunch raises concerns about
supply. LME copper stock levels have been dropping almost
constantly since August and currently stand at their lowest level
"Focus remained on the tightening spreads as traders scramble
for metals, " said brokerage Marex.
Concerns about energy-related production shutdowns are also
pushing investors to bet on higher prices still to come.
Speculators increased their net-long bets on all LME base metals
except nickel last week, with the net long in zinc jumping 30% last
week, the brokerage said.
Philips 3Q Sales Missed Market Views, Lowers FY Guidance
Koninklijke Philips NV reported on Monday a rise in net profit
for the third quarter but sales declined and it lowered its
full-year growth and margin guidance.
The Dutch medical-technology group said its results were hit by
supply-chain issues, which led to longer lead times to convert its
strong order book to revenue during the period. It expects the
problems to continue in the fourth quarter.
Facebook to Hire 10,000 Workers in EU to Build Up
Facebook Inc. is planning to create 10,000 jobs in the European
Union over the next five years to build a virtual realm it sees as
a key component of its future and a major driver of new technology
The U.S. social-media giant said Sunday it would embark on a
recruiting drive for highly skilled workers in the region to help
build a "metaverse," an online realm where users engage with one
another using technologies including virtual and augmented reality.
The company said it would focus on hiring in Germany, France,
Italy, Spain, Poland, the Netherlands and Ireland.
German Reinsurers Eye Higher Prices After Flood-Hit Year
German reinsurers said Monday that they expect higher prices in
Europe in January renewals as the industry handles major
natural-catastrophe losses and higher inflation.
Muenchener Rueckversicherungs-Gesellschaft AG and Hannover Rueck
SE's local subsidiary E+S Rueckversicherung AG said disastrous
flooding in Germany, alongside losses due to the pandemic and
rising inflation, will result in higher prices for primary
insurance and reinsurance.
Siemens To Carve Out Large-Drives Applications Unit
Siemens AG said Monday that it will carve out its large-drives
unit as it continues its strategy to refocus the group.
The German industrial and technology company will spin off the
activities of its Large Drives Applications division, which makes
heavy-duty drive systems for ships, mines and mills, into separate
legal entities, a spokesman told Dow Jones Newswires.
Playtech Agrees to GBP Bln Aristocrat Leisure Takeover
Playtech PLC said late Sunday that it has agreed to a 2.1
billion-pound ($2.89 billion) takeover from Australian-listed
gaming content and technology company Aristocrat Leisure Ltd.
through its subsidiary Aristocrat (UK) Holdings Ltd.
Under the offer, accepting shareholders of the FTSE 250-listed
gambling-technology company will get 680 pence in cash for each
share owned. The offer price is a 58% premium to Playtech's closing
price of 429.20 pence on Friday.
U.K. House Prices Hit Record High Across All Market Segments in
U.K. house prices in October rose 1.8%, with every region and
market segment delivering increases, according to new data from
property portal Rightmove PLC.
The average price of property coming to the market rose by 5,983
pounds ($8,181) in October, the largest percentage jump for this
time of year since 2015 and bringing the national average to an
all-time high of GBP344,445, Rightmove said. The portal measured
88,694 prices across the U.K over the period from Sept. 12 to Oct.
Some Investors Say Bank Pledges to Cut Funding for Arctic
Drilling Contain Loopholes
Some of the world's largest banks, including Goldman Sachs Group
Inc., HSBC Holdings PLC and BNP Paribas SA, pledged in recent years
to stop direct financing of Arctic oil exploration. The idea was to
choke off money for fossil-fuel extraction in a pristine natural
A battle has broken out among investors, environmentalists and
banks over those pledges. Some investors and environmentalists say
they contain loopholes, and money has continued to flow from big
banks to companies active in areas of Norway, Russia, Canada and
Alaska rich in oil and gas. Under pressure, two of the banks, BNP
and HSBC, say they are reviewing their pledges to make them
Nigeria's Gangs Raised Millions by Kidnapping Children. Now the
Government Can't Stop Them.
GUSAU, Nigeria-The masked men emerged from the forest on
motorbikes, surrounding a young intelligence officer clutching a
cash-filled bag. The ransom, nearly $50,000 in crisp Nigerian bank
notes, wasn't for a person, but to retrieve a weapon that directly
threatened the country's president.
A kidnapping gang encamped in Nigeria's Rugu forest had seized
an antiaircraft gun in a clash with a military unit. That posed a
threat to President Muhammadu Buhari, who had been planning to fly
to his hometown about 80 miles away, and the government needed to
buy it back.
British Police Question Alleged Attacker in Killing of
Conservative Lawmaker David Amess
LONDON-British police Sunday were questioning a 25-year-old man
they say stabbed to death a Conservative member of parliament as
authorities sought to determine whether he was motivated by Islamic
The suspect in the killing of Tory lawmaker David Amess on
Friday was identified as Ali Harbi Ali, a U.K. citizen of Somali
descent, according to a British official. Authorities haven't
officially named him. He was being held at a London police station
under the Terror Act.
As Afghanistan Sinks Into Destitution, Some Sell Children to
HERAT, Afghanistan-Desperate to feed her family, Saleha, a
housecleaner here in western Afghanistan, has incurred such an
insurmountable debt that the only way she sees out is to hand over
her 3-year-old daughter, Najiba, to the man who lent her the
The debt is $550.
China Faces Slower Growth Path as It Pursues Longer-Term
HONG KONG-With its pandemic recovery in the rear-view mirror,
China now faces a prolonged period of slower growth with increasing
policy uncertainties as Beijing attempts to carry out ambitious
China's economy recorded a steeper-than-expected economic
slowdown in the third quarter of the year, expanding 4.9% from a
year earlier. The disappointing growth rate reflected a host of
headwinds: Tighter rules on the property market that have chilled
activity in the sector, widespread power shortages and continued
concerns about Covid-19 that have weighed on consumer spending.
Supply-Chain Bottlenecks, Elevated Inflation to Last Well Into
Next Year, Survey Finds
Uncomfortably high inflation will grip the U.S. economy well
into 2022, as constrained supply chains keep upward pressure on
prices and, increasingly, curb output, according to economists
surveyed this month by The Wall Street Journal.
The economists' inflation projections are up dramatically from
July, while short-term growth outlooks are lower.
GOP Sees Opening as Biden Copes With Pre-Christmas Inflation,
The White House is wrestling with supply-chain issues and
elevated inflation ahead of the winter holiday shopping season-two
economic problems that Republicans say the administration's own
policies would exacerbate, driving up the risk of empty store
shelves and higher holiday prices.
With just over a month to go before the holiday shopping season
unofficially starts the day after Thanksgiving, the Biden
administration is seeking ways to ease the bottlenecks in the
strained supply chain, while acknowledging that they might not be
able resolve all those pressures immediately.
Green Investing Looks to Clean Up the Maritime Industry
First bonds went green. Now they are going blue.
Seaspan Corp., the world's largest containership lessor by
cargo-carrying capacity, sold nearly $1 billion of so-called blue
bonds earlier this year that sought to entice new investors by
promising to fund vessels that will lower emissions and pollution
'Crazy' Bets on $200 Oil Invade the Options Market
A roaring trade in bullish crude-oil options says the 2021
energy rally is far from over.
Traders once again are betting that the U.S. oil benchmark will
surge above $100 a barrel, from a recent $82, as early as December.
U.S. crude, known as West Texas Intermediate or WTI, is up 10% this
month, and 70% this year, but it hasn't hit $100 since the oil
crash of 2014.
Global Investors Gain a New Way to Bet on Stocks in China
Hong Kong started trading in futures tied to an index of stocks
from mainland China, giving global investors a new tool for betting
on Chinese markets.
The futures are linked to the MSCI China A 50 Connect Index,
which was launched in August. The benchmark covers major A
shares-as stocks listed in either Shanghai or Shenzhen are
known-that are accessible to international investors through the
Stock Connect system that links onshore markets with Hong Kong.
Behind the Energy Crisis: Fossil Fuel Investment Drops, and
Renewables Aren't Ready
An energy price shock is serving as a reminder of the world's
continued dependency on fossil fuels-even amid efforts to shift to
renewable sources of energy.
Demand for oil, coal and natural gas has skyrocketed world-wide
in recent weeks as unusual weather conditions and resurgent
economies emerging from the pandemic combine to create energy
shortages from China to Brazil to the U.K.
Economy Week Ahead: China GDP, U.S. Industry and Housing
The latest snapshot of China's economic growth, U.S. industrial
production and the housing market highlight this week's economic
Cars Are Making Money Like Homes-For Now
Financially, your car is behaving more like your home right now,
bringing new opportunities and hard-to-foresee risks.
Used-vehicle values have broken records over the past year, with
inflation running at an unprecedented 24%, according to the latest
official data. This is painful for car buyers, but there is a
less-discussed flip side: It is a great time to be a car owner.
Write to email@example.com
Write to us at firstname.lastname@example.org
We offer an enhanced version of this briefing that is optimized
for viewing on mobile devices and sent directly to your email
inbox. If you would like to sign up, please go to
This article is a text version of a Wall Street Journal
newsletter published earlier today.
(END) Dow Jones Newswires
October 18, 2021 06:37 ET (10:37 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.
From Nov 2021 to Dec 2021
From Dec 2020 to Dec 2021