EUROPE MARKETS: Europe Stocks Turn Lower After China Threatens Reaction To U.S. Tariffs

By Steve Goldstein, MarketWatch

A fledgling recovery in European stocks was stamped out on Thursday after China threatened countermeasures to U.S. tariffs.

   After a 1.68% tumble on Wednesday, the Stoxx Europe 600   dropped 0.7% to 363.69. 

The German DAX weakened 0.64% to 11419.64 and the French CAC 40 declined 0.43% to 5228.51.

The U.K. FTSE 100 , weighed down by companies trading without the right to the next dividend payment, weakened fell 0.85% to 7086.77.

What's happening

In the wake of weak German and Chinese economy data, the U.S. yield curve inverted on Wednesday, with the 2-year yield rising above the 10-year yield -- which has happened ahead of the last five recessions.

(https://fred.stlouisfed.org/graph/graph-landing.php?g=oCUz)

On Thursday, the yield curve uninverted -- the 10-year yield was once again higher than the 2-year .

News that China threatened countermeasures to U.S. tariffs reversed an early gain in U.S. stock futures . There's a wave of economic data to come, including on weekly jobless claims, retail sales and manufacturing sentiment in New York and Philadelphia, after the Dow Jones Industrial Average tumbled 800 points on Wednesday.

In the U.K., retail sales grew a surprisingly strong 3.3% in July compared to a year ago, according to the Office for National Statistics. See:Amazon Prime Day boosts British retail sales in July (http://www.marketwatch.com/story/amazon-prime-day-boosts-british-retail-sales-in-july-2019-08-15)

Focus stocks

A.P. Moller-Maersk (MAERSK-B.KO) (MAERSK-B.KO) shares initially rose as the shipping group reported a better than forecast second-quarter profit on slight 0.5% revenue growth, but turned lower on trade war concerns.

Carlsberg (CARL-A.KO) rallied 4% as the brewer reported largely in-line first-half results, with particularly strong results in Asia. Carlsberg shares have surged 44% this year.

Aegon (AGN.AE) shares tumbled 7% as the Dutch insurer reported a decline in its solvency ratio, which is a measure of its balance-sheet strength.

(END) Dow Jones Newswires

August 15, 2019 06:08 ET (10:08 GMT)

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