European Markets Rebounded Shaking Off Global Worries, German Exports and Imports Declined In June

Bridgette Randall
07 Aug, 2024
London

European markets rebounded as investors reacted to domestic economic updates and economic reports in China. 

Benchmark indexes in London, Paris, and Frankfurt increased between 1% and 2%, and German industrial output rose more than expected and exports fell in June. 

Global market sentiment recovered after days of weakness following a string of weak key economic U.S. data and weaker-than-expected earnings from big tech companies. 

Moreover, investors were also on edge after the Bank of Japan unexpectedly raised the interest rate, forcing the yen carry trade to unwind, roiling global financial markets, and spiking volatility to a level not seen since 1987. 

Advanced chip equipment makers were under pressure for the second week in a row after investors unwound artificial intelligence-linked stocks on fears of stretched valuations and a possible slowdown in spending by mega-cap tech companies. 

 

Germany's Exports and Imports Eased In June 

Calendar and seasonally adjusted goods exports from Germany in June declined 3.4% from the previous month to €127.7 billion, and goods imports rose 0.3% to €107.3 billion, resulting in a trade surplus of €20.4 billion. 

On an annual basis, exports decreased 4.4% and imports fell 6.4%, the Federal Statistics Office, or Destatis, reported Thursday. 

The trade balance in May 2024 was €25.3 billion, and it was €19.0 billion in June 2023. 

Exports to the EU countries decreased 3.4% to €69.7 billion, shipments to the U.S. fell 7.7% to €12.9 billion, shipments to China rose 3.4% to €7.9 billion, and shipments to the U.K. edged down 0.6% to €6.5 billion. 

Imports from the EU nations eased 0.4% to €51.9 billion, declined 6.9% to €12.9 billion, from the U.S. decreased 6.5% to €7.4 billion, and from the UK increased 11.1% to €3.1 billion. 

 

German Industrial Output Expanded

In a separate report, the statistical office noted industrial production increased 1.4% in June but declined 4.1% from a year ago. 

Production rebounded largely because of a 7.5% increase in the automotive sector, reversing the decline of 9.9% in the previous month. 

Industrial production, excluding energy and construction, increased by 1.5% in June compared to May, adjusted for seasonal and calendar effects. 

Production of capital goods rose by 2.5%, intermediate goods by 2.1%, but consumer goods fell by 2.4%. 

Outside industry, electricity and energy production rose by 2.9%, and construction activities rose by 0.3% in June 2024 compared to the previous month. 

 

Europe Indexes and Yields

The DAX index increased by 1.3% to 17,573.64; the CAC-40 index rose by 1.7% to 7,252.66; and the FTSE 100 index advanced by 1.2% to 8,116.19. 

The yield on 10-year German bonds edged higher to 2.28%, French bonds inched higher to 3.02%, the UK gilts inched higher to 3.92%, and Italian bonds increased to 3.71%.

The euro edged down to $1.09; the British pound inched lower to $1.272; and the U.S. dollar weakened to 86.39 Swiss cents.

Brent crude increased $1.22 to $77.21 a barrel, and the Dutch TTF natural gas fell by €0.50 to €37.08 per MWh.

 

Europe Stock Movers

Novo Nordisk declined 3.7% to DKK 855.0 despite the Danish pharmaceutical company reporting weaker-than-expected second quarter profit and trimming its full-year outlook.

Puma SE decreased 11.2% to €36.79 after the athleticwear maker trimmed its full-year outlook. 

Commerzbank AG decreased 4.9% to €12.53 after the financial services company reported a decline in profit in the second quarter. 

Continental AG soared 5.8% to €57.54 after the automobile parts maker reported solid second-quarter results. 

Beiersdorf AG decreased 1.8% to €129.05, and the consumer products maker reported lower-than-expected second quarter results. 

ABN AMRO jumped 4.8% to €15.13 after the Dutch financial services company lifted its annual net interest income estimate.

Coca-Cola HBC decreased 2.7% to 2,686.0 pence after the Greece-based beverage bottling company cited macroeconomic headwinds in the second half of the year. 

Glencore increased 2.2% to 401.60 pence after the mining company shelved its plan to spin off its coal mining division, despite gaining support from its shareholders. 

Vodafone Group gained 3.2% to 72.66 pence after the wireless telecom operator launched its €500 million stock repurchase plan. 

WPP declined 2.6% to 698.40 pence after the advertising services provider agreed to sell its majority stake in FGS Global to KKR at an enterprise value of £1.7 billion. 

The state sale will generate a total of £604 million after tax. 

TotalEnergies SE increased 2.5% to €60.64 after the company agreed to sell a 50% stake in Total PARCO Pakistan Ltd. to Switzerland-based Gunvor Group.