Europe stocks head for lower open at end of winning week

European stocks look set for a lower open Friday, according to data from IG. The U.K.’s FTSE 100 is heading for a 15.5 point fall to 7,427, while Germany’s DAX is set to open 14.4 points lower at 16,130. France’s CAC 40 and Italy’s MIB were seen opening lower by 13.8 and 26 points, respectively.

— Jenni Reid

Funding in fintech startups dropped 49% globally to $23 billion in the first half of 2023 as compared to a year ago, S&P Global Market Intelligence data showed.

Deal counts in the first six months of 2023 totaled 1,178 — a 64% plunge from the same period last year.

Meanwhile, mega funding rounds of more than $100 million have been scarce, with only nine in second quarter 2023, when it was 23 in first quarter 2023 and 55 in second quarter 2022, said S&P.

The failure of Silicon Valley Bank in March “dampened investor risk appetite,” said S&P.

“A trio of big-ticket deals — Stripe’s $6.87 billion, an Ant Group unit’s $1.5 billion and PhonePe’s $850 million— masked the deterioration in the fintech funding environment in the first half of 2023,” said Sampath Sharma Nariyanuri, fintech research analyst at S&P Global Market Intelligence.

However, Nariyanuri expects “a recovery in public market valuations of tech stocks, a stabilization in interest rates and a pickup in M&A activity” to boost the second half of 2023.

— Sheila Chiang

The International Monetary Fund said that growth in China is slowing due to weaker private investment as well as slowing exports and reduced domestic demand.

The organization’s spokesperson Julie Kozak said in a briefing, “Growth momentum has been slowing recently in China, largely due to weaker than expected private investment” pointing to a recent decline in exports after seeing strong performance in the first quarter of the year.

“The overall picture for growth in China is one of a slowing economy, and that is consistent with the forecast that we that we had in in April,” noting an “updated forecast” for China will be reflected in IMF’s next World Economic Outlook.

— Jihye Lee

The producer price index, a measure of what wholesalers pay for goods, rose 0.1% in June. Economists polled by Dow Jones expected an increase of 0.2%. Core PPI, which strips out volatile food and energy prices, climbed 0.1% — also less than expected.

— Fred Imbert

Reserve Bank of Australia’s deputy governor Michele Bullock has been appointed as the new central bank chief, the country’s Treasury said Friday.

She succeeds incumbent Philip Lowe, whose term will end on August 17 — that brings a close to his 43 years at the bank. Treasurer Jim Chalmers described Bullock’s appointment as “the optimal balance between providing exceptional experience & expertise and offering a fresh leadership perspective.”

Bullock’s appointment would mean that the RBA will have a vacant deputy governor’s post, which the government said that it will fill in the coming months.

— Lim Hui Jie

Federal Reserve Board Governor Christopher Waller voiced the need for two more rate hikes for inflation to be brought down to its target.

“I see two more 25-basis-point hikes in the target range over the four remaining meetings this year as necessary to keep inflation moving toward our target,” he said, speaking at at event at New York University on Thursday.

He called the latest consumer price index reading that showed a cooling inflation rate as “welcome” news, while adding, “one data point does not make a trend.”

“I am going to need to see this improvement sustained before I am confident that inflation has decelerated,” he said.

— Jihye Lee

Bank of America has described the AI opportunity within the software industry as “undeniably vast” and ranked European companies in the sector.

“We see gen AI as an opportunity for the Software industry to derive both potential revenue uplift via enhanced value proposition and data monetization, alongside productivity improvements,” the bank said.

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— Lucy Handley

In another bullish sign for the market, the S&P 500 is now up 3.3% since the Fed started raising rates in March 2022. The move comes as traders cheer the prospects of the central bank taming inflation without tipping the economy into a recession.

“For first time in 2023 we are currently being asked by multiple clients if we think the S&P 500 is now on track to clock an ATH before year end. I am going with a yes on this,” Goldman Sachs’ John Flood wrote in a note Wednesday.

— Fred Imbert