European stocks paused on Thursday, as data revealed the coronavirus lockdowns are causing unprecedented pain to the Continent’s services sector.
After a 1.8% surge on Wednesday, the Stoxx Europe 600 SXXP,
Futures on the Dow Jones Industrial Average YM00,
The latest readings on the European economy were grim. The IHS Markit flash eurozone services purchasing managers index fell in April to a record-low reading of 11.7, below expectations of 24 on a scale where any reading below 50 indicates a deteriorating economy. IHS Markit said the readings of both services and manufacturing PMI are indicative of the eurozone economy contracting at a quarterly rate of approximately 7.5%.
“April saw unprecedented damage to the eurozone economy amid virus lockdown measures coupled with slumping global demand and shortages of both staff and inputs,” said Chris Williamson, chief business economist at IHS Markit. “The extent to which the PMI survey has shown business to have collapsed across the eurozone greatly exceeds anything ever seen before in over 20 years of data collection.”
The U.K. services PMI, meanwhile, plunged to 12.3 in April from 34.5 in March.
Traders awaited the latest U.S. jobs figures. Initial jobless claims in the seven days running from April 12 to April 18 probably grew by at least 4 million, with estimates ranging as high as 5.25 million, according to the latest MarketWatch survey of economists.
The European Council is meeting via videoconference, as they deliberate on how to fund the emergency measures worth €540 billion that finance ministers have previously agreed, and whether to allow joint issuance of securities. “European leaders will discuss the Eurogroup proposals for a common policy response to the COVID-19 crisis and will likely ask finance ministers to continue to work on the design of a Recovery Fund to restart the economy, but an agreement on this fund is unlikely, in our view,” said economists at Barclays.
Shares of Unilever ULVR,
Oil futures CL.1,