European stocks close lower on Friday; German data raises concerns of ‘inevitable’ recession

European stocks were in the red at the close of Friday’s session, trailing their Asian and Wall Street counterparts, and amid dismal data in the region’s biggest economy.

At the end of Friday’s session, the Stoxx Europe 600 fell 1.16%, the London FTSE 100 fell 0.09%, the Swiss Market Index lost 0.79%, the French CAC 40 lost 1.17% and the German DAX plunged 1.59%.

Destatis released grim data from Germany, with both retail sales and industrial production declining on a monthly basis in August. Import prices in the base month were up 32.7% year-over-year, the largest annual increase since March 1974, mainly attributable to high energy prices.

“We don’t need a crystal ball to see further weakening of German industry in the coming months,” Carsten Brzeski, Global Head of Macro at ING, said in a note. “High energy prices will increasingly weigh on private consumption and industrial production, making a contraction of the economy inevitable. The only question is how severe such a contraction or recession will be.”

The Swiss State Secretariat for Economic Affairs said the unemployment rate in September fell to 1.9% from 2% in August, beating estimates of no change.

In the UK, labor productivity in Q2 rose slightly by 0.3% QOQ, compared to the early estimate of zero growth and the decline of 0.6% in Q1. The Halifax House Price Index, meanwhile, pointed to a slowdown in house price growth in Britain from September.

Shares of Credit Suisse Group (CSGN.SW) jumped 5.36% on the Swiss stock exchange as it launched an offer to buy up to 3 billion francs ($3.03 billion) in debt to ease concerns over the financial health of the banking giant. Italian utility company ENEL (ENEL.MI) has launched a four-tranche offering of sustainability bonds worth $4 billion. The stock lost 1.16%.

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James R. Rhodes