German Investor Confidence Slumps

Arthi Gupta
14 Sep, 2010
New York City

The European indexes fell after German investor confidence plunged in September. Euro-zone industrial production static in July and labor cost growth slackened in the second quarter. French inflation eased in August.

[R]4:00 PM Frankfurt – The European indexes fell after German investor confidence plunged in September. Euro-zone industrial production static in July and labor cost growth slackened in the second quarter. French inflation eased in August.[/R]

U.S. and Asian markets traded mixed.

German exports improved in the first-half and inflation rose in August.

In Paris CAC 40 Index increased 0.25 or 0.01% to close at 3,767.40 and in Frankfurt DAX Index edged higher 4.36 or 0.07% to close at 6,266.04.

German investor confidence slumped more than expected in September, according to research firm ZEW institute. The ZEW index of economic sentiment fell to a negative reading of -4.3 from 14.0 in August, its lowest level since early 2009.

In addition, ZEW said Germany''s export sector is likely to face more downside risks in the coming months due to the expiring of stimulus measures in many countries and the fact that many advanced countries are still seeing sluggish growth.

Euro-zone seasonally adjusted industrial production remained stable on a monthly basis in July following a 0.2% fall in June, Eurostat said today. In the EU27 nations also industrial production remained unchanged during the month.

Production of durable consumer goods fell 0.6% in the euro area and that of intermediate goods decreased 0.3% in July. Non-durable consumer goods'' output rose 0.1%, while production of capital goods rose 0.1%. Energy output decreased 0.1% in July.

On an annual basis, total industrial production rose 7.1% in the euro area in July. In EU 27, production increased 6.8% annually.

Euro-zone''s hourly labor costs increased at a slower pace in the second quarter, according to a report released by the Eurostat today.

Hourly labor costs increased a working day adjusted 1.6% year-on-year in the second quarter, but slower than a 1.9% growth in the previous quarter, revised from 2.1% rise reported initially. In the same period last year, labor costs increased 3.5%.

Hourly labor costs in manufacturing rose 1.1% annually in the second quarter and in construction grew 1.7%. Labor costs climbed 1.9% in services.

In the EU27, hourly labor costs grew 1.6% from a year ago in the second quarter, compared to a 2.1% rise in the previous quarter, revised from 2.2% rise estimated initially. Hourly wages and salaries rose 1.5% and the non-wage component grew 1.7% in the second quarter.

German exports increased in the first-half of the year compared to the same period a year ago. Exports increased 17.1% on an annual basis to €458.3 billion in the January to June period, the Federal Statistics Office said today.

Exports to EU member states grew 12% to €279.8 billion and to the euro area exports rose 10.9% to €191.3 billion in the January to June period.

German imports increased 15% on an annual basis to €383.6 billion in the January to June period, the statistics office said. Imports from China grew 35.6% to €34.6 billion during the period.

Germany''s wholesale price inflation index rose 6.4% year-on-year in August compared to a 5.3% growth in July, according to data published by the Federal Statistics Office today. The wholesale price index increased for the ninth consecutive month.

The wholesale prices of metals and metal ores increased 21.1% annually in August, while solid fuels and oil products prices rose 9.2%.

Wholesale prices from a month ago increased 1.6% in August, compared to a 0.3% fall in the preceding month. Wholesale prices of solid fuels and oil products rose 2.8%.

French annual inflation eased to 1.4% in August from 1.9% in July, according to data released from the statistics office Insee today. Consumer prices rose 0.2% in August after decreasing 0.3% in July.

European online job demand in August remained stable as many recruiters across Europe slowed down hiring efforts in favor of summer vacations, according to a report published by Monster Worldwide Inc. The monster employment index stayed at 115 in August. Germany and the UK recorded the sharpest monthly growth among regions monitored by the index.

Gainers & Losers

Air Liquide SA gained 0.29% to €89.86 after the French industrial gases producer said it would invest $450 million in two hydrogen production units with total production capacity of 262 million standard cubic feet per day.

E.ON AG tumbled 3.08% to €22.69 after the power and gas company was downgraded to “hold” from “buy” at UniCredit SpA.

JCDecaux SA fell 0.23% to €19.62 after the advertising firm named Jean- Sebastien Decaux as Chief Executive Officer for southern Europe, a position created to bring the group''s business in Spain, Portugal and Italy into a single regional entity.

Nokia Corporation advanced 1.91% to $10.13 after the manufacturer of mobile devices announced the resignation of Anssi Vanjoki, the head of its mobile solutions unit.

Norcon Plc decreased 1.45% to 68.00 pence after the project management and outsourcing services provider signed a contract with the Norwegian telecom company Ventelo with the aim of expanding in to new markets. Ventelo provides both mobile and fixed line services to all market segments in Norway.

Volkswagen AG edged lower 0.18% to €78.96 after the German automaker named Jonathan Browning as President and CEO of Volkswagen Group of America, effective October 1.