European stock markets experienced a downturn on Friday, reflecting a broader trend of negativity as the Stoxx Europe 600 index saw a decline of 0.85%. Major indices echoed this sentiment; the Swiss Market Index saw a decrease of 0.61%, France's CAC dropped by 0.84%, the FTSE in London lost 0.73%, and Germany's DAX slid a notable 1.03%.
The European Central Bank's Q3 survey, which surveyed professional forecasters, revealed that expectations for the euro area's headline inflation remain unchanged at 2.4% for 2024 and are projected at 2% for 2025. Interestingly, the forecast for inflation in 2026 was revised downward from 2% to 1.9%, highlighting a slightly optimistic outlook in the long-term trajectory of inflation.
In Germany, the Federal Statistical Office reported a 1.6% decline in producer prices for industrial products year-over-year for June 2023. However, on a month-to-month basis, prices registered a small increase of 0.2% compared to May, indicating fluctuations in the economic landscape. Across the English Channel, the UK experienced a notable dip in retail sales volume for June, which fell an estimated 1.2% compared to May's strong performance where sales increased by 2.9%.
This decline, as reported by the Office for National Statistics, reflects a possible slowdown in consumer spending, with most sectors facing a downturn. Furthermore, it was reported that retail sales volumes fell 0.1% in Q2 compared to Q1, suggesting a hesitancy from consumers amid rising inflation and economic uncertainty.
In the corporate realm, significant news arose from European automaker Stellantis, which announced a recall of approximately 24,000 Chrysler Pacifica plug-in hybrid minivans globally due to fire risks. This announcement has led to a decline of the company's shares, which closed more than 2% lower in Paris following the news.
Meanwhile, British pharmaceutical giant GSK made headlines as the European Medicines Agency accepted the marketing authorization application for the drug Blenrep. This application, which is for a treatment of relapsed or refractory multiple myeloma, proposes the use of Blenrep in combination with bortezomib plus dexamethasone or pomalidomide plus dexamethasone.
Adding complexity to the financial landscape, the Competition and Markets Authority in the UK ruled that British financial institution Nationwide Building Society's acquisition of Virgin Money UK does not pose a realistic threat of significantly reducing competition in the market, a decision welcomed in the financial community.
In corporate finance news, shares of Sartorius saw a sharp decline of 16% in Frankfurt after the pharmaceutical and laboratory equipment supplier reported lower revenue and earnings for the first half of the year, an announcement that clearly rattled investors. This situation serves as a reminder of the volatility present in today’s market, where investors must remain vigilant and informed about ongoing developments..