Investing.com - European stock markets are expected to open lower Monday after the release of underwhelming Chinese growth data, while the second-quarter earnings season gets underway in earnest.
At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.3% lower, CAC 40 futures in France dropped 0.6% and the FTSE 100 futures contract in the U.K. fell 0.3%.
The main European stock indices posted healthy gains last week, with the broad-based Stoxx 600 index climbing nearly 3%, after data showing rapidly cooling inflation in the U.S. raised expectations the Federal Reserve may be close to ending its aggressive rate-hiking cycle, boosting the U.S. economy, a major global growth driver.
Chinese growth slowing sharply
However, this sentiment has dissipated after the release of data showing that economic growth in China, a major export market for Europe’s largest companies, slowed substantially through the second quarter.
China’s second-quarter gross domestic product grew 0.8% from the prior quarter, slightly above expectations for growth of 0.5%, but slowed substantially from the 2.2% seen in the prior quarter.
On an annualized basis, GDP grew 6.3% in the second quarter, thanks largely to a lower basis for comparison from the COVID-impacted period last year, and this was lower than expectations for growth of 7.3%.
The Chinese economy has now expanded a total 5.5% so far in 2023, thanks largely to a strong first quarter, but growth has slowed over the past three months.
ECB speakers due
The economic data slate is largely empty Monday, with only final Italian consumer prices due, but investors will look to speeches from ECB Board members Fabio Panetta, Frank Elderson and Philip Lane, as well as President Christine Lagarde, during the session for clues of the central bank’s thinking ahead of the next policy-setting meeting near the end of this month.
Quarterly earnings start to pour in
This week sees the new quarterly earnings season kick off in earnest, although Monday’s schedule is quite light.
Across the pond, Tesla (NASDAQ:TSLA) will be the first of the massive growth and technology names to report on Wednesday, while bank earnings continue, with Bank of America (NYSE:BAC) on Tuesday and Goldman Sachs (NYSE:GS) on Wednesday.
Back in Europe, the Russian state has taken control of French foods giant Danone's (EPA:DANO) Russian subsidiary along with beer company Carlsberg's (CSE:CARLa) stake in a local brewer, according to a decree signed by President Vladimir Putin on Sunday.
Oil prices dip after weak Chinese GDP data
Oil prices fell Monday after the disappointing Chinese growth numbers raised concerns about the economic recovery and thus future demand from the world’s largest crude importer.
Additionally, two of the three Libyan oil fields that were shut down on Thursday, including the country’s second-largest, Sharara, resumed production over the weekend, adding supply to the global market.
By 02:00 ET, the U.S. crude futures traded 1% lower at $74.54 a barrel, while the Brent contract dropped 1% to $79.05.
Both benchmarks recorded a third straight week of gains last week, climbing to their highest levels since April.
Additionally, gold futures fell 0.3% to $1,957.95/oz, while EUR/USD traded 0.1% higher at 1.1230.