The big European stock markets fall again due to signs of recession

The big European stock markets continue their bearish wave this Thursday and fall after knowing indicators that show the weakness of the economy while doubts persist among investors about whether the restrictive monetary policy is achieving its objective of reducing inflation and close to its end.

London has lost 0.74%, Madrid, 0.52%; Milan, 0.44%; Paris, 0.33%; Frankfurt, 0.31%; while the Euro Stoxx 50 index, which represents the largest listed companies, has risen 0.14%.

Added to the poor result of the PMI indices on Tuesday and investor confidence today was the reduction in the preliminary data for German GDP for the first quarter, which leaves the largest economy in the euro area in technical recession.

“Looking ahead, the question is whether further weakness awaits us, driven by high inflation and high interest rates”indicates the manager abrdn in a market commentary, although its main option is that the cause is the rise in rates.

In the US, the GDP revision has ended unchanged and weekly job applications have fallen below expectations, despite the strong rate hikes in the last year (in which they have gone from 0 to 5.25%) .

The Fed minutes, released yesterday with the market closed, “the complacent market expectations about rate cuts in the second part of the year are slightly moderated”indicates Income 4.

And in the day-to-day negotiation of the debt ceiling, this morning Fitch put on watch for a possible downgrade of the US rating, although at the same time it has warned that it believes it is unlikely that the country defaults and trusts in a political agreement.

At the close of the stock markets in Europe, the euro continues to fall and traded at 1.072 dollars, 0.27% below the close of the day before; gold, 0.61%, up to US$ 1,945 an ounce; and Brent oil, which has risen in recent days due to what some analysts saw as warnings from Saudi Arabia about new production cuts, loses 3.3% and is bought at US$ 75 a barrel.

Despite the fall in equities, uncertainty about the future of interest rates boosts the yield on the debt of euro area countries by around five basis points. The interest on the ten-year bond in Germany, considered the safest, has climbed this Thursday to 2,519.