Warnings from the ECB do nothing to cheer up markets

As we enter the Christmas season, the global indices remained very bah humbug as plunging oil and the receding Japanese economy was joined by more doom and gloom from the Eurozone.

Today Ewald Nowotny, ECB policymaker, backed Draghi’s push for quantitative easing, highlighted the dire state of the Eurozone economy. However, unlike the Draghi-QE inspired boosts the markets have received in recent times, Nowotny’s words of warning merely piled on more bad news for the global indices. Coming after last week’s non-action from Draghi, Nowotny’s comments drew focus to the Eurozone’s insufficiencies without providing any new hope for stimulus.

Swfitly after Nowotny’s comments came news from the OECD that Eurozone growth was slowing down. Unsurprisingly, the DAX remained at a loss, hovering around the 10057 level; whilst this is not a disastrous drop, it has put a dampener on the German index’s breaching of the 10000 mark.

However much it doesn’t like it, the FTSE is linked to the Eurozone’s performance, meaning with no good news of its own, the FTSE also continued to fall today. The UK index has continued to spend the day below the 6700 level it had recently worked so hard to reach. Tomorrow sees UK manufacturing production and the NIESR GDP estimate; a strong round of data could see the FTSE escape the suffocating shadow of the Eurozone’s economic woes.

Regardless of its record closing highs, the Dow Jones has often opened weak as it combats the morning’s dismal news, usually coming from Europe and Asia. Today has been no different, with the Dow and the dollar both dipping slightly. The former opened 2 points down at 17957.5, whilst the dollar lingered at the 121 mark against the yen, making no real gains. However, the Dow should be able to shake off the doom-laden comments coming from the Eurozone as it strives for 18000 on the back of its self-produced bullish sentiment.

What will be harder to shake is the poor performance of one of its key stocks, the fast-food giant McDonald’s. The gleam of the Golden Arches lost more of its lustre today as comparable store sales fell 4.6% in the USA and 2.2% worldwide. These figures far exceeded forecasts, and are the latest in a long line of sliding sales results for Ronald and co. Share prices fell 3.6% following the announcement, as the company suffers in the face of a more health conscious younger generation, expired meat scandals in China, and an ever-expanding menu slowing service times.