German carmakers have been hit by trade war worries and new regulation.
London CNN Business  — 

1. Tencent earnings: WeChat owner Tencent (TCEHY) reported an increase in sales on Wednesday despite regulatory headaches in China.

The company said revenue jumped 24% in the third quarter compared to the same period last year. Tencent attributed the growth to payment-related services, online advertising, digital content sales and its cloud service.

The technology and entertainment conglomerate has had a tough year. Its stock is down about 30% so far in 2018.

The company was hit hard by a Chinese government crackdown on gaming. China is the world’s biggest gaming market, and Tencent is the world’s biggest gaming company.

Tencent released 10 new smartphone games this year and said Wednesday it has 15 more ready to go, pending regulatory approval. Smartphone games sales increased 7% over the previous year, while PC gaming revenue declined 15%.

2. Brexit deadlock: The United Kingdom continues to march towards Brexit without a viable exit plan.

The problems plaguing the economies are different, but their size means the pain cannot be ignored: Japan boasts the world’s third largest economy, while Germany is ranked fourth.

The German economy contracted 0.2% in the third quarter compared to the previous three months, its first decline in more than three years. Data showed the slowdown was mainly due to weak exports and a fall in consumer spending.

Global trade tensions and new vehicle emissions tests have also hit the country’s massive car industry.

Japan said its GDP shrunk 0.3% in the third quarter. The country recently enjoyed its longest streak of economic growth in decades, but momentum has stalled this year.

Inflation remains below the central bank’s target of 2% despite a massive stimulus program and unusual policies like negative interest rates.

There were other reasons to worry about Europe: New data showed the eurozone economy grew 0.2% in the third quarter, just half the rate reported for the previous three months. Growth in the wider European Union also slowed.

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5. Global market overview: US stock futures were flat.

European markets opened mostly higher. Stocks in Asia finished the session mixed.

Italian banks were under pressure after the country’s government refused to cave to pressure from the European Commission to slash its planned budget deficit.

The Dow Jones industrial average closed 0.1% lower on Wednesday. The S&P 500 dropped 0.5% and the Nasdaq shed 0.6%.

US crude futures have stabilized after dropping 7% on Tuesday. It was crude’s worst day since September 2015 and a record 12th consecutive decline. Oil was trading up 0.8% on Wednesday at $56.00 per barrel.

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6. Companies and economics: Shares in Swedbank dropped 3.7% after the Swedish bank fired its CEO amid a widening money-laundering probe.

Blue Apron (APRN) said Tuesday it will cut 4% of its workforce in order to become more profitable. The company is shedding customers and reported a $34 million loss in the third quarter.

US inflation data for October will be released at 8:30 a.m. ET.

The pound was jittery ahead of a crucial meeting of Prime Minister Theresa May’s cabinet.

The European Union and the United Kingdom have agreed a draft Brexit divorce, but a key test comes later on Wednesday when May will seek her divided cabinet’s backing.

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7. Coming this week:
Thursday — US final estimate Q4 GDP
Friday — Huawei earnings; Carmax (KMX) earnings

7. Coming this week: