European markets open to close, investors focus on the Fed’s next move


Stocks on the move: Maersk down 7%, Vestas up 7%

Danish hearing health care company Demant fell more than 12% by early afternoon to the bottom of the Stoxx 600 after its preliminary third-quarter earnings report.

Maersk, the world’s largest container shipping firm, saw its shares fall more than 7% after posting record profits for the third quarter on the back of high ocean freight rates, but noted a slowdown in demand.

At the top of the European blue chip index, Vestas shares jumped more than 7% after the Danish wind turbine company’s earnings call helped ease market concerns about its earlier report.

– Elliot Smith

Spanish manufacturing dips sharply in October

Spanish factory activity contracted sharply in October, its fourth consecutive month of shrinkage as high inflation caused output and new orders to plunge.

The S&P Global manufacturing PMI (purchasing managers’ index) fell to 44.7, its lowest level since May 2020, from 49.0 in September. Any reading below 50 represents a contraction.

– Elliot Smith

World’s largest container shipping firm Maersk, a barometer for global trade, warns of ‘dark clouds on the horizon’

Maersk, the world’s largest container shipping firm, on Wednesday posted record profits for the third quarter on the back of high ocean freight rates, but noted a slowdown in demand.

The Danish giant, widely seen as a barometer for global trade, reported earnings before interest, tax, depreciation and amortization (EBITDA) of $10.9 billion for the quarter, above consensus analyst projections of $9.8 billion and up around 60% from the same period a year ago.

CEO Søren Skou said the “exceptional results” this year were driven by a continued rise in ocean freight rates, but said it was clear that these have peaked and warned of “dark clouds on the horizon.”

Read the full story here.

– Elliot Smith

Stocks on the move: Straumann up 4%, Demant down 11%

Corporate earnings remain a key driver of individual share price action in Europe.

Danish hearing health care company Demant fell more than 11% in early trade to the bottom of the Stoxx 600 after its preliminary third-quarter earnings report.

At the top of the index, Swiss dental equipment firm Straumann gained 4% after its quarterly results.

Bank of England set for biggest rate hike in 33 years, but economists expect dovish tilt

The Bank of England is expected to raise rates by 75 basis points Thursday, its largest hike since 1989.

Vuk Valcic | SOPA Images | LightRocket | Getty Images

Oil futures rise following industry report of fall in U.S. crude inventories

Oil future prices rose on Wednesday after industry reports showed a drop in U.S. crude inventories in the latest week, Reuters reported, citing figures by the American Petroleum Institute Tuesday.

Brent crude futures gained $1.31, or 1.46%, to stand at $95.87 per barrel, while U.S. West Texas Intermediate rose 1.28% to $89.67 per barrel.

— Lee Ying Shan

CNBC Pro: Buy this automaker to play massive pent-up demand in U.S., fund manager says

There is huge demand for cars in both the U.S. and China right now, according to fund manager Steven Glass.

He named one autos stock to cash in, which he said has a “very well-managed” balance sheet and a price-to-earnings ratio at a 20-year low.

Pro subscribers can read more here.

— Zavier Ong

A Fed pivot is far off, says New York Life’s Goodwin

Investors may be getting a bit too excited about potential changes from the Federal Reserve, according to Lauren Goodwin, economist and portfolio strategist at New York Life Investments.

Goodwin said in a note that she expected the Fed to hike by 0.75 of a percentage point on Wednesday and half a point in December, but that the slowdown should not be seen as the start of a big shift from the central bank.

“A Fed pause is not the same as a pivot. Certainly, deteriorating economic and credit conditions could cause the Fed to pivot modestly at some point, but a full pivot into accommodative territory is highly unlikely in the next year,” Goodwin said in a note.

Goodwin pointed out that the first rate hikes should now start to show their impact across the broad economy, instead of just housing. However, the Fed will need several months of data to go its way before changing course.

“At this point, with inflation surprising as much as it has already, the Fed will want to see clear signs of reversal in wage growth before pivoting. Recession should be considered a base case rather than a risk,” Goodwin said.

— Jesse Pound

CNBC Pro: Goldman’s Currie reveals ‘the best’ hedge against inflation, rate hikes and geopolitical risks

Goldman’s Jeff Currie says there’s one investment that can protect investors from rising interest rates, inflation, and geopolitical risk.

Currie, global head of commodities research at Goldman Sachs, said it has 20-30% growth potential in the short term, with additional upside risks to the price target.

CNBC Pro subscribers can read more here.

— Ganesh Rao

European markets: Here are the opening calls

European markets are looking at a positive start to trading on Wednesday as investors gear up for the latest monetary policy decision from the U.S. Federal Reserve.

Many analysts expect the meeting will result in a 75 basis point interest rate hike. Investors will also monitor the central bank’s statement and Fed Chair Jerome Powell’s press conference for signs of a slowing the tightening pace.

London’s FTSE index is expected to open 21 points higher at 7,115, Germany’s DAX up 84 points at 13,422, France’s CAC up 36 points at 6,364 and Italy’s FTSE MIB up 119 points at 22,771, according to data from IG.

Earnings will come from Next, Aston Martin Lagonda, GSK, Metro and Maersk. German unemployment data for October will also be released.

— Holly Ellyatt



Read More: European markets open to close, investors focus on the Fed’s next move

2022-11-02 06:36:00

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