European Stock Futures Open Lower

European Stock Futures Open Lower

European stock futures are trading flat while the US markets will remain closed for a holiday. Investors are more focused on the most important economic number which came out of China- the Chinese GDP data. Beijing reported its economy grew 2.3% in 2020 and the main factor behind this meagre number was the global pandemic triggered by a coronavirus. 

Coronavirus cases have started to surge again in China once again. The province of Hebei has seen a surge in Covid-19 cases. Coronavirus initially emerged in Wuhan towards the end of 2019. However, according to China’s official data, Beijing wasted little to no time controlling the situation across the whole country by applying strict coronavirus measures. 

The GDP rose by 6.5% during the final quarter of 2020; the forecast was 6.1%. The Chinese economy contracted 6.8% in the first three months of 2020. But what is more important for investors and traders is the fact that consumers in China remained very reluctant in their spending. And this represents a real threat not only for China but also for the global economy as China is the second-largest economy in the world. The evidence of the reluctance among consumers can be seen by looking at the retail sales number, which contracted 3.9% for the year. However, the number for the last quarter confirmed a recovery and rose 4.6% from a year ago. 

WhatsApp and Facebook 

In terms of stock news, WhatsApp, which is owned by Facebook, decided to delay its privacy update. The privacy update was initially scheduled for February 8th. This update created enormous confusion among consumers as they came under the impression that WhatsApp would be sharing their messages and data with Facebook. The US stock market is closed today, but Facebook is likely to see a stronger influence of this news tomorrow when the stock market will reopen for trading. 

Gold Prices Recover Some Losses 

Gold prices are trading higher as traders believe that global economic recovery is still not entirely on track. Investors know that the damage caused by coronavirus to the global economy is going to take some time to recover. Today’s Chinese GDP is the chief reason we see more bids for the precious metal. 

Having said that, the overall price trend for the gold price continues to remain under pressure as traders are still not interested in bargain hunting. The precious metal is well off from its all-time high of $2,075, currently trading near the $1,836 price level. 

Looking at the COMEX gold data released on January 12th, it becomes clear that speculators are still not convinced that a bottom is in place as they have scaled further back from their bullish gold positions – a lot of this may be due to the President-elect’s recent speech.  

Joe Biden is hoping that a vast vaccination process will start sooner rather than later, and that will put an end to this pandemic and help the largest economy of the world to get back on track. Biden has made it clear that during the first 100-days of his presidency, he wants 100 million people to have the Covid-19 vaccination—an ambitious target.