European Stock Futures Lower; French GDP Growth Slows in Third Quarter

European stock markets are expected to open lower Friday, with sentiment hit by weak results from e-commerce giant Amazon and a hefty drop in French quarterly growth as the earnings season continues.

At 02:00 ET (06:00 GMT), the DAX futures contract in Germany traded 0.9% lower, CAC 40 futures in France dropped 0.5% and the FTSE 100 futures contract in the U.K. fell 0.7%.

Amazon, widely seen as a bellwether for the global e-commerce industry, forecast late Thursday a slowdown in sales growth for the holiday season, warning that inflation-wary consumers and businesses had less money to spend.

The company pointed out that Europe was likely to be its hardest-hit region this holiday season, with Germany and Britain its biggest markets after the United States.

“Fuel cost and the impacts of the Ukraine war are hitting the economies in Europe even harder than the U.S., and that’s showing up in consumer spend,” said Brian Olsavsky, the chief financial officer.

The European Central Bank raised interest rates by 75 basis points again on Thursday and said it expects to increase them “further”, as it continues to aggressively fight red-hot inflation even as growth in the region slows dramatically.

French third-quarter gross domestic product rose 0.2% on the quarter, data released Friday showed, a gain of 1.0% on an annual basis. This represents a sharp slowdown from growth of 0.5% and 4.2%, respectively, in the previous quarter.

Growth data from Spain and Germany are scheduled for later in the session, along with Eurozone consumer confidence data.

In the corporate sector, Volkswagen reported earnings of erl-351||4.3 billion euros ($4.29 billion) in the third quarter with an earnings margin of 6%, weighed down by 1.6 billion in one-off effects from suspending activities in Russia and listing Porsche AG.

French drugmaker Sanofi forecast projected faster earnings growth this year on strong demand for its bestselling drug Dupixent and for its flu vaccines, while European plane manufacturer Airbus raised its 2022 free cashflow forecast on the back of a strong dollar and reaffirmed delivery and production targets.

Spain’s Caixabank said that its net profit in the third quarter rose 18.8% on an annual basis thanks to an increase in lending income, fees and higher earnings from its insurance business.

Oil prices fell Friday, weighed by China, the world’s largest crude importer, imposing fresh Covid lockdowns in a number of cities as infections start to rise again, maintaining the country’s Covid Zero policy.

China reported 1,506 new COVID-19 infections on Oct. 27, the National Health Commission said on Friday, up from 1,264 new cases a day earlier.

However, despite these losses, the market is heading for a weekly gain, supported by supply tightness, robust U.S. exports, and a weakening U.S. dollar. Crude is also on course to gain in October following a run of four monthly declines.

By 02:00 ET, U.S. crude futures traded 1.3% lower at $87.94 a barrel, while the Brent contract fell 1% to $94.09.

Additionally, gold futures fell 0.1% to $1,665.00/oz, while EUR/USD traded 0.2% higher at 0.9980.

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