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Why Mixed Data Didn’t Inspire the Stock Markets

David Meyer

Weak Earnings and Economic Releases Weigh on the Global Market

(Continued from Prior Part)

Sharp correction in European markets

Critical European markets (DBEU) continued to fall on April 29. The contrasting data release from the Eurozone added more uncertainty for investors. The fall in the European indexes (HEDJ) was led by the SPDR Euro Stoxx 50 ETF (FEZ). It fell 2.9% for the day. The German DAX and the French CAC 40 also saw significant negative movements. They fell by 2.7% and 2.8%, respectively.

Among other major European indexes (IEV), the crude-related Russian economy (RSX) was also trading with a negative bias despite the uptick in crude futures (USO). Crude oil futures were trading 2.1% higher at 1:30 PM EST. The Russian MICEX fell 0.85%.

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Non-Eurozone markets also suffered losses. The United Kingdom’s (FKU) FTSE 100 fell 1.3% and Sweden’s (EWD) OMX Stockholm 30 fell 2.1% at 1:30 PM EST.

Eurozone GDP and unemployment were strong

There was a flurry of data releases from Eurozone economies on April 29, 2016. We’ll focus on broad-based data for the Eurozone as a whole. The European quarter-over-quarter GDP (gross domestic product) rose by 0.6% for the first quarter. This was higher than the forecast of a 0.2% rise. The year-over-year GDP also beat the forecast with a rise of 1.6%. The unemployment rate for March came out on a strong note. It fell to 10.2% compared to 10.4% the previous month.

The inflation release from the Eurozone was below the forecast. Inflation fell by 0.2% YoY against the forecast of a 0.1% rise. Core inflation rose 0.7%—compared to the forecast of a 0.9% rise.

Impact on the ADRs

Looking at the performance of European ADRs (American depositary receipts) in the banking sector, Deutsche Bank (DB) fell 2.6% on April 29. French ADR Orange SA (ORAN) fell 0.66%. Finnish company Nokia (NOK) and Belgian company Anheuser-Busch Inbev SA (BUD) fell 0.84% and 0.78%, respectively. CRH (CRH) is an Irish construction company. It was trading higher by 1.8%.

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