Stock markets struggle as fears over the economy grow

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LONDON, May 16 (Reuters) – European stocks fell on Monday and Wall Street was poised to open lower as investor sentiment struggled to recover from last week’s sell-off on fears. a slowdown in economic growth.

Global stocks hit their lowest point in 18 months last week as investors worried that raising interest rates to counter high inflation would hurt the global economy.

Surprisingly weak economic data out of China kept those concerns front and center on Monday. April retail sales fell 11.1% on the year, nearly double fall forecasts, as full or partial COVID-19 lockdowns were imposed in dozens of cities. Industrial production fell 2.9% as analysts expected a slight increase. Read more

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As of 11:04 GMT, the MSCI World Stock Index (.MIWD00000PUS), which tracks stocks from 50 countries, rose around 0.1% on the day, struggling to recover from last week’s lows.

Europe’s STOXX 600 was down 0.2% (.STOXX) while London’s FTSE 100 was down (.FTSE).

US stock index futures pointed to a weaker open for Wall STreet, with Nasdaq futures down 0.4% and S&P 500 futures down 0.3%.

“Inflation is still relatively high…that’s something that keeps markets relatively nervous. At the same time, central banks are tightening further,” said Antoine Lesne, head of strategy and research at ETFs for the EMEA region at State Street’s SPDR.

“It’s hard to find a hedge against falling stocks in this environment,” Lesne said.

Some investors looked to buy U.S. dollars, gold or shorter-duration fixed-income securities, he said.

European government bond yields rose, with Germany‘s 10-year yield up 4 basis points to around 0.988% – still below the around eight-year high of 1.19% he reached last Monday.

The European Central Bank will likely decide at its next meeting to end its stimulus program in July and raise interest rates “very soon” thereafter, ECB policy chief Pablo Hernández said on Saturday. cos. Read more

“Investors have shown an increasing focus on recession risk,” ING rate strategists wrote in a note to clients.

Economic growth concerns could allow government bonds to function as safe havens, ING said.

“It would take a lot of optimism for the 10-year Treasuries and the Bund to test 3% and 1% higher in our view,” they said.

At 11:37 GMT, the US 10-year yield was at 2.9130%.

The dollar index, which hit a 20-year high of 105.01 last week, was down about 0.1% on the day at 104.41.

The euro was close to its lowest since 2017. ECB policy chief Francois Villeroy de Galhau said euro weakness could threaten the central bank’s efforts to steer inflation towards its target. Read more

Soaring inflation and rising interest rates sent U.S. consumer confidence plummeting to an 11-year low in early May and raised the stakes for April retail sales expected on Tuesday. Read more

Meanwhile, UK inflation data due on Wednesday is expected to show prices rose 9.1% year-on-year.

Oil prices fell as investors took advantage of a rally in the previous session. Read more

Brent crude futures fell 1.1% to $110.29 a barrel at 1121 GMT, while US West Texas Intermediate (WTI) crude futures CLc1 fell 1% to $109.44 per barrel.

Bitcoin was trading at around $29,967. Last week it plunged to $25,401.05 – its lowest level since December 2020. Already hit by declining risk appetite, cryptocurrencies sold off last week when a popular stablecoin , terraUSD, crashed and lost its peg to the dollar.

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Reporting by Elizabeth Howcroft, editing by Ed Osmond and Chizu Nomiyama

Our standards: The Thomson Reuters Trust Principles.

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