European stock markets edged lower Tuesday, as investors digested dire Chinese growth numbers as concerns about the global economic outlook remain high. At 04:15 ET (09:15 GMT), the DAX index in Germany traded 0.2% lower, the CAC 40 in France fell 0.1% and the FTSE 100 in the U.K. dropped 0.2%. European equities have had a positive start to the year, as investors hoped that a slowdown by central banks, and the Federal Reserve in particular, of their seemingly relentless monetary tightening would result in a soft landing this year. However, data out of China earlier Tuesday has reminded investors of the difficult current situation, as growth in the world’s second largest economy slowed sharply in the fourth quarter due to stringent COVID curbs, dragging down 2022 growth to one of its worst in nearly half a century. The prospect of an imminent global recession is taxing participants at the start of the World Economic Forum’s annual meeting, back in Davos after a COVID-influenced three year absence. Two-thirds of economists surveyed by the WEF expect a global recession this year, with some 18% considering it “extremely likely” – more than twice as many as in the previous survey conducted in September 2022.

That Said, the Economic News Released Tuesday Painted a Slightly More Positive Picture.

The U.K. labor market stayed stronger than expected in December, with the number of benefit claimants rising by 19,700, rather than the 19,800 expected by economists, while November’s data were revised down to show an increase of only 16,100, rather than the 30,500 initially reported. Germany’s ZEW survey of economic sentiment for January is due for release later in the session, and this is expected to show an improvement to -15.0 from -23.3 in December. European Central Bank Governing Council member Mario Centeno said Tuesday, in Davos, that the euro-area economy is performing better than many anticipated in the face of record inflation and the energy crisis that erupted after Russia attacked Ukraine. In corporate news, Ocado (LON:OCDO) stock slumped over 6% after the online grocery group said sales suffered from inflation and the return of in-store shopping after the pandemic in the three months through November, with revenue in the period up only 0.3% from a year earlier. Hugo Boss (ETR:BOSSn) predicted Tuesday its annual operating profit will exceed expectations after the German fashion house overcame a COVID-related slide in Chinese demand to post quarterly sales above €1 billion (€1 = $1.0833) for the first time ever. Its shares still fell 2% amid uncertainty over the return of Chinese customers. Experian (LON:EXPN) posted a 7% jump in its third-quarter revenue on Tuesday, as the world’s largest credit data firm benefited from steady demand for loans and the launch of new products. Oil prices traded in a mixed fashion Tuesday, with investors digesting the Chinese growth data amid continued optimism about a recovery in the country’s fuel demand this year. Also of interest, the Organization of Petroleum Exporting Countries releases its latest analysis later in the session, and traders will be looking for any change in the cartel’s demand forecast for the year.By 04:15 ET, U.S. crude futures traded 0.2% lower at $79.99 a barrel, while the Brent contract rose 0.7% to $85.03. There was no settlement on Monday for the U.S. contract due to a holiday for Martin Luther King Day.