Friday Morning Coffee Nr. 67: Crossroads

260719 Friday Morning Coffee

Friday Morning Coffee Nr. 67: Crossroads

The economic data coming out of Europe remains weak. Leading indicators, particularly in the manufacturing sector, continue their downward trend and point towards economic contraction in the Eurozone. German companies’ business outlook tumbled to the lowest in a decade and the Bundesbank says the economy probably shrank in the second quarter. At the same time, we have more and more prominent examples of blue-chip companies in the capital goods, chemical and other cyclical sectors issuing profit warnings. We also see anecdotal evidence that the weakness is beginning to spread to the service sector with wider implications on the broader economy.