European stocks fell down Thursday and with this, investor are anticipating how will the European Union officials will take action and face the debt crisis as well as Chinese trade figures put fuel on the outlook of the world’s largest economy. The stocks have been kept afloat this week as eurozone officials pledged their accountability to creating a sound action toward the submerging market. One solution that is devised is the write-downs on Greek debt and a motivation to allow banks fortify their capital alongside resulting losses.

These new actions to suppress debt crisis are seen as positive moves for stocks in curbing Greece’s disorderly default and the resulting losses to bank on their government bonds which could possible result to even bigger banking crisis. Inability to contain the situation could lead to a worst case scenario like choking the wider economy and even resulting to recession. However, the devised debt plan still needs further deliberation and planning as officials will gather together at a European summit 9 days from now along with a group of 20 summit developing and rich countries in November.
According to Stephen Lewis, "The period of good feelings may well be drawing to a close. This is because the tight timetable that the November G20 meeting imposes will leave little more time to settle intractable problems. Devising a 'roadmap', that is, an analysis of what needs to be done, is the easy part. To come up with viable measures will be more difficult." Aggravation the crisis is China’s trade surplus which narrowed for two consecutive months in September. This indicates cooling in the Chinese and global economies with the first having a drop in surplus o $17.8 billion in August which is greatly lower compared to July’s 30-month high of $31.5. This clearly shows that the freezing economic recovery could impact China’s escalating economic growth.

Meanwhile, Britain’s FTSE 100 fell at 0.9% to 5,398 while Germany’s DAX dropped down from 1.5% to 5907 and France’s CAC 40 fell down from 0.8 to 5,398. Though the Euro had pretty did big gains recently, it was reversed from a high of 0.4% to a low of $1.3731. Wall Street is expected to ease in the open as Dow futures up down 0.3% at 11,388 and the wider Standard & Poor’s coming at 0.5% lower at 1,193. A focus will also be given to the next batch of earnings due and among earnmarked reported include Google Inc. and JP Morgan Chase & Co. Furthermore, earnings coming from companies like Alcoa Inc and PepsiCo. Inc have given investors mixed news regarding the largest economy.
On Wednesday, Barroso called the attention of European banks to increase billions in new capital as well as for a more stringent accounting with regards to the rising debt crisis. He also called for a permanent bailout fund in mid-2012, which is a year advance of schedule. Additionally, European officials are deliberating about reopening the July 21 deal wherein banks agreed to take 21% losses in Greek debt and this could be done by having longer-dating bonds at lower interest rates. But officials suggested that a change in the deal could even worsen the situation and could result to larger losses.