Futures on European stocks and U.S. stocks opened a week lower after unexpectedly weak Chinese economic data heightened fears of a global slowdown.
The Stoxx 600 regional stock index fell 0.8 percent on early trades, while London’s FTSE 100 lost 0.7 percent.
Futures for the S&P 500 on Wall Street fell 0.9 percent and the tech Nasdaq 100 fell 1.2 percent.
Monday’s rallies signaled that global action could continue the longest weekly losing streak since the 2008 financial crisis, when inflation forced central banks to raise interest rates at a time when investors worried that economic activity was not strong enough to withstand tight monetary policy.
“Markets are falling not only because of higher interest rates,” said Luca Paolini, chief strategist at Pictet Asset Management.
“The risk of a recession [in major economies] essentially, ”he added. “The reality is that much of the world economy is largely shrinking.”
Data on Monday, retail sales in China fell 11.1 percent in April from the same month last year, worse than economists had expected as a wave of hard-hitting coronavirus blocks across the country reduced demand. Industrial production, which analysts had expected to grow slightly, fell 2.9 percent.
Meanwhile, Brussels was set to cut his growth forecasts for the eurozone and raising the inflation forecast to reflect the projected effects of the energy crisis caused by Russia’s invasion of Ukraine on the EU economy.
Lloyd Blankfein, senior chairman of Goldman Sachs, told CBS News on Sunday that there is a “very, very high risk” of a recession in the United States. The world’s largest economy contracted unexpectedly in the first quarter of the year, when consumer price inflation was approaching a four-decade high.
The U.S. Federal Reserve boosted its borrowing value by 0.5 percentage points earlier this month, while Chairman Jay Powell said moves of the same size “should be on the table at subsequent meetings”.
Also the President of the European Central Bank Christine Lagarde signaled last week the institution was ready to abandon its long-standing policy of keeping interest rates in the currency bloc below zero.
In addition to concerns about sustained global inflation, wheat prices rose to a maximum limit on Monday after India banned exports in response to supply disruptions caused by the war in Ukraine.
In Asia, mainland China’s CSI 300 index fell 0.8 percent, while Hong Kong’s Hang Seng added 0.2 percent and Tokyo’s Topix traded without falling.
Brent crude fell 1.2 percent to $ 110.2 a barrel.
Yields on 10-year U.S. Treasury bonds, moving back to the value of the reference debt security, fell 0.04 percentage points to 2.9 percent as traders withdrew from stocks to buy back low-risk assets.