Ten consumer staples stocks that tumbled the most in September

Factory growth in the euro zone accelerated significantly in September, reaching its fastest rate in over four years, according to a survey. The S&P Global Manufacturing PMI for the region increased to 52.9 in September from 52.7 in August, marking its highest level since May 2022. This surge is primarily fueled by rising demand for investment goods like machinery and equipment, with output of these capital goods growing at a rate not witnessed since the post-COVID recovery five years ago, according to Chris Williamson, chief business economist at S&P Global Market Intelligence.

The upturn is widespread across the bloc, with the Netherlands leading the expansion, followed by solid growth in Germany and modest growth in France, Italy, and Spain. New orders expanded at their fastest pace since early 2022, bolstered by a more than four-and-a-half-year high in export growth. Business confidence rose to its strongest level since February, supported by a 55-month high in the output sub-index.

However, rising prices could pose challenges to the recovery, as both input and output inflation accelerated in September, indicating mounting inflationary pressures. Official data is expected to show a 3.6% increase in inflation from August, the highest since September 2023. The European Central Bank may consider further rate hikes in response to these elevated inflation expectations, as markets currently anticipate three rate hikes by mid-2027.

Consumer demand remains subdued due to the increased cost of living, adding to concerns about the recovery's sustainability.