Categories
Markets

European stocks climb as global markets look for rebound; Stoxx 600 up 1%

LONDON — European stocks advanced on Friday as global markets looked to regain some ground after a bruising week, with investors assessing the outlook for inflation and interest rates.

The pan-European Stoxx 600 added 1% in early trade, with banks climbing 1.9% to lead gains as all sectors and major bourses entered positive territory.

European markets fell on Thursday as investors remained concerned about slowing growth, interest rate hikes and red-hot April inflation data from the United States, which sparked concerns that a path of aggressive interest rate hiking lies ahead.

US Federal Reserve Chairman Jerome Powell said Thursday that he could not guarantee a so-called “soft landing” that tempers inflation without pushing the economy into recession.

Global stocks have endured a rollercoaster week but look set to regain some ground on Friday. Shares in Asia-Pacific advanced by mid-afternoon with Japan’s Nikkei 225 leading the way on a 2.6% climb.

Meanwhile, US stock futures were higher in early premarket trade as investors hope the S&P 500 can avoid sliding into bear market territory, with the index closing down more than 18% from its all-time high on Thursday, just 2% shy of an official bear market.

The tech-heavy Nasdaq is already in a bear market, closing Thursday down more than 29% from its all-time high, while the Dow Jones Industrial Average has failed for six consecutive trading sessions.

The Stoxx 600 in Europe began Friday’s session down 13% since the beginning of the year.

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Investors are also monitoring the geopolitical fallout from the war in Ukraine. Russia on Thursday threatened retaliation against Finland after Finnish leaders said the northern European nation must apply to join NATO “without delay.”

European leaders are also facing a race to secure alternative gas suppliers after Moscow announced sanctions on European subsidiaries of its majority state-owned corporation Gazprom. The move came after Ukraine’s state-owned grid operator suspended Russian flows into Europe through a key entry point.

On the data front, French inflation was confirmed at an annual 5.4% in April.

Euro area industrial production readings for March are due on Friday morning.

In terms of individual share price movement, British investment company Bridgepoint Group jumped more than 10% following its annual general meeting, while Finnish state-owned energy company Fortum climbed 9.9% in early trade.

Shares of Belgian pharmaceutical company UCB fell 13% after the US Food and Drug Administration said it cannot approve a key psoriasis drug.

Swedish industrial company Atlas Copco dropped 75% due to recalculation after a share split which came into effect on Friday, whereby one share was replaced by four new ordinary shares and one redemption share.

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Categories
Markets

Investors digest US inflation data for April

LONDON — European stocks are expected to fall sharply at the open as global markets digest the latest inflation reading out of the United States. The reading has sparked concerns that a path of aggressive rate hiking lies ahead.

The UK’s FTSE index is seen opening 88 points lower at 7,251, Germany’s DAX 216 points lower at 13,596, France’s CAC 40 down 107 points at 6,150 and Italy’s FTSE MIB down 488 points at 22,953, according to data from IG.

Global investors are digesting the April inflation reading from the US, which showed the consumer price index surged 8.3% in April as compared with a year ago. The inflation rate was higher than expected and still running close to a 40-year high of 8.5%.

Analysts are mixed on whether the data suggests inflation has hit a peak.

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The April reading, which represented a slight ease from March’s peak, was also above the Dow Jones estimate for an 8.1% gain. Shares on Wall Street dropped following the data and markets in Asia-Pacific declined in Thursday morning trade following the losses stateside.

US stock futures were slightly higher Wednesday evening as investors look ahead the latest US data on jobless claims and the producer price index, which measures prices at the wholesale level.

In Europe, earnings come from Veolia, Bouygues, Aegon, Allianz, Commerzbank, RWE, Siemens and Zurich Insurance. UK preliminary GDP figures for the first quarter are also due.

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Categories
Markets

Investors digest US inflation data for April

LONDON — European stocks are expected to fall sharply at the open as global markets digest the latest inflation reading out of the United States. The reading has sparked concerns that a path of aggressive rate hiking lies ahead.

The UK’s FTSE index is seen opening 88 points lower at 7,251, Germany’s DAX 216 points lower at 13,596, France’s CAC 40 down 107 points at 6,150 and Italy’s FTSE MIB down 488 points at 22,953, according to data from IG.

Global investors are digesting the April inflation reading from the US, which showed the consumer price index surged 8.3% in April as compared with a year ago. The inflation rate was higher than expected and still running close to a 40-year high of 8.5%.

Analysts are mixed on whether the data suggests inflation has hit a peak.

Stock picks and investing trends from CNBC Pro:

The April reading, which represented a slight ease from March’s peak, was also above the Dow Jones estimate for an 8.1% gain. Shares on Wall Street dropped following the data and markets in Asia-Pacific declined in Thursday morning trade following the losses stateside.

US stock futures were slightly higher Wednesday evening as investors look ahead the latest US data on jobless claims and the producer price index, which measures prices at the wholesale level.

In Europe, earnings come from Veolia, Bouygues, Aegon, Allianz, Commerzbank, RWE, Siemens and Zurich Insurance. UK preliminary GDP figures for the first quarter are also due.

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Categories
Business

investors look ahead to US inflation data for April

LONDON — European stocks advanced on Wednesday morning as investors looked ahead to the latest inflation reading.

The pan-European Stoxx 600 added 1.2% by mid-morning. Autos jumped 2.9% to lead gains as all sectors traded in positive territory except health care, which fell 0.9%.

The positive morning in Europe came after choppy trading sessions in the region, and in markets further afield.

European stocks climbed on Tuesday as global markets rebounded from a broad sell-off in recent days, prompted mainly by concerns about inflation and rising interest rates — and the potential for a global recession.

On Tuesday, US stocks seesawed as the major averages struggled to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen.

salman ahmed

Global Head of Macro and Strategic Asset Allocation, Fidelity International

Investors are looking ahead to US inflation data for April on Wednesday which is expected to come in slightly below March’s 8.5% and could signal that inflation has reached a peak.

Recent market volatility has been driven by investor concerns over rising interest rates and question marks over how aggressively the Federal Reserve will act to curb rising inflation. In addition, investors continue to monitor the ongoing conflict in Ukraine and lockdowns in China.

European natural gas prices jumped on Wednesday after Ukraine’s state-owned grid operator suspended Russian gas flows through a key entry point.

Gas TSO of Ukraine on Tuesday announced force majeure on its Sokhranivka gas metering station and Novopskov border compressor station, both of which are situated in Russian-occupied territory in eastern Ukraine and account for almost a third of gas flows from Russia to Europe.

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Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC on Wednesday that his team were underweight on stocks across the board, but favored the US over Europe.

“Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen,” he added.

Overnight, shares in Asia-Pacific were mixed as investors watched for market reaction to the release of higher-than-expected Chinese inflation data for April. Meanwhile, US stock futures were higher in early morning trading Wednesday ahead of the forthcoming US inflation data.

In Europe, German inflation in April rose to an annual 7.4%, its highest print since 1981.

Earnings from a wide range of companies were released before the bell, including Alstom, Commerzbank, Continental, E.On, Siemens Energy, Thyssenkrupp and Tui.

British catering company Compass Group jumped 9.6% after an upbeat earnings report, while German engineering and steel conglomerate Thyssenkrupp also added more than 10% after beating expectations.

Swedish Match shares climbed 8.7%, building on Tuesday’s surge after the tobacco company agreed to a $16 billion sale to US giant Philip Morris International.

British home emergency repairs firm HomeServe bounced more than 11% after Bloomberg reported that Canada’s Brookfield Asset Management was nearing a takeover of the company.

At the bottom of the Stoxx 600, German biotech firm Evotec plunged more than 14% after its first-quarter results.

Shares of German drugmaker Bayer fell 6.5% after US President Joe Biden’s administration asked the US Supreme Court not to consider the company’s appeal to dismiss claims from customers alleging that its Roundup weedkiller causes cancer.

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Categories
Business

investors look ahead to US inflation data for April

LONDON — European stocks advanced on Wednesday morning as investors looked ahead to the latest inflation reading.

The pan-European Stoxx 600 added 1.2% by mid-morning. Autos jumped 2.9% to lead gains as all sectors traded in positive territory except health care, which fell 0.9%.

The positive morning in Europe came after choppy trading sessions in the region, and in markets further afield.

European stocks climbed on Tuesday as global markets rebounded from a broad sell-off in recent days, prompted mainly by concerns about inflation and rising interest rates — and the potential for a global recession.

On Tuesday, US stocks seesawed as the major averages struggled to recover from three days of heavy selling that brought the S&P 500 to its lowest level in more than a year.

Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen.

salman ahmed

Global Head of Macro and Strategic Asset Allocation, Fidelity International

Investors are looking ahead to US inflation data for April on Wednesday which is expected to come in slightly below March’s 8.5% and could signal that inflation has reached a peak.

Recent market volatility has been driven by investor concerns over rising interest rates and question marks over how aggressively the Federal Reserve will act to curb rising inflation. In addition, investors continue to monitor the ongoing conflict in Ukraine and lockdowns in China.

European natural gas prices jumped on Wednesday after Ukraine’s state-owned grid operator suspended Russian gas flows through a key entry point.

Gas TSO of Ukraine on Tuesday announced force majeure on its Sokhranivka gas metering station and Novopskov border compressor station, both of which are situated in Russian-occupied territory in eastern Ukraine and account for almost a third of gas flows from Russia to Europe.

Stock picks and investing trends from CNBC Pro:

Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International, told CNBC on Wednesday that his team were underweight on stocks across the board, but favored the US over Europe.

“Europe, we think, is in the center of the storm. We think the gas disruptions are likely to worsen,” he added.

Overnight, shares in Asia-Pacific were mixed as investors watched for market reaction to the release of higher-than-expected Chinese inflation data for April. Meanwhile, US stock futures were higher in early morning trading Wednesday ahead of the forthcoming US inflation data.

In Europe, German inflation in April rose to an annual 7.4%, its highest print since 1981.

Earnings from a wide range of companies were released before the bell, including Alstom, Commerzbank, Continental, E.On, Siemens Energy, Thyssenkrupp and Tui.

British catering company Compass Group jumped 9.6% after an upbeat earnings report, while German engineering and steel conglomerate Thyssenkrupp also added more than 10% after beating expectations.

Swedish Match shares climbed 8.7%, building on Tuesday’s surge after the tobacco company agreed to a $16 billion sale to US giant Philip Morris International.

British home emergency repairs firm HomeServe bounced more than 11% after Bloomberg reported that Canada’s Brookfield Asset Management was nearing a takeover of the company.

At the bottom of the Stoxx 600, German biotech firm Evotec plunged more than 14% after its first-quarter results.

Shares of German drugmaker Bayer fell 6.5% after US President Joe Biden’s administration asked the US Supreme Court not to consider the company’s appeal to dismiss claims from customers alleging that its Roundup weedkiller causes cancer.

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Categories
Business

China’s consumer prices climb as Covid prompts food stockpiling

Fresh vegetable prices rose by 24% year-on-year in April as consumers stocked up to prepare for potential stay-home orders. Pictured here is a delivery driver for Alibaba’s Hema Fresh supermarket in Beijing on May 10, 2022.

Jade Gao | Afp | Getty Images

BEIJING — China’s consumer and producer prices rose more than expected in April, according to data from the National Bureau of Statistics released Wednesday.

The consumer price index rose by 2.1% last month from a year ago, boosted by a surge in energy and fresh vegetable costs. The reading topped expectations for a 1.8% rise forecast by a Reuters poll.

April’s figure was also the highest since November’s 2.3% print and well above the 18-month average of 0.9% consumer price inflation. China’s official CPI target for 2022 is “around 3%.”

“The main driver was a pick up of food prices due to rising transportation costs and restocking demand from tighter Covid restrictions,” Goldman Sachs analysts said in a report Wednesday.

“In year-over-year terms, we expect CPI inflation to rise and PPI inflation to fall on base effects,” the report said. “Sequentially CPI inflation may moderate in the near term as the inflationary pressures from food prices might ease with the improved Covid situation in China.”

Since March, mainland China has tightened travel restrictions and imposed stay-home orders in many parts of cities to contain the country’s worst Covid outbreak since early 2020. The controls have prevented many factories from producing at full capacity or moving goods between suppliers and customers.

Fresh vegetable prices rose by 24% year-on-year in April, while fresh fruit prices increased by 14.1% during that time. Pork prices, a major contributor to China’s CPI, posted a relatively rare 1.5% increase from the prior month for a more moderate year-on-year drop of 33.3%.

Fuel prices for transportation climbed by 28.4% from a year earlier, reflecting recent surges in oil and commodity prices.

Sluggish consumer demand

However, China’s rising consumer price index doesn’t mean locals face the same pressure that Americans do.

US consumer prices have arisen by their most since the early 1980s, even when stripping out food and energy. The April figure due out later on Wednesday is forecast to remain near the decades-high increase of 8.5% seen in March.

In China, excluding food and energy prices, the consumer price index rose by a muted 0.9% in April from a year ago.

Longer-term, analysts warn that overall consumer demand in China remains depressed due to uncertainty about future income.

Some businesses have even cut prices to attract buyers.

The Caixin Services PMI for April — a monthly sentiment survey — found that businesses cut prices at the fastest pace since May 2020, “with a number of firms lowering their fees in order to attract new business amid muted demand conditions,” a release said.

A similar survey of manufacturers found that despite a sharp rise in the cost of production, selling prices increased only modestly as firms tried to remain competitive and attract new business.

Factory costs remain high

In April, China’s producer price index moderated for a fourth-straight month, rising 8% year-on-year. That was still above Reuters’ forecast for a 7.7% increase.

Within PPI, purchase prices rose far more quickly than so-called factory gate prices — the price of goods sold from factories for further manufacturing or sale to distributors.

That’s an indication that cost pressures are unevenly distributed across industries, said Bruce Pang, head of macro and strategy research at China Renaissance.

He said that means different businesses will face different kinds of impact on their profit margins.

There’s an “urgent need” for monetary and fiscal policy to provide targeted support for companies seriously affected by the pandemic, Pang said in Chinese, translated by CNBC.

Read more about China from CNBC Pro

China’s central bank and other authorities have announced a number of measures to support growth in the last few weeks, although the scale of those measures has generally disappointed markets.

“The Covid lockdowns have eroded the effectiveness of policy easing, and mutated demand more than supply,” Morgan Stanley’s Chief China Economist Robin Xing and a team said in a note Tuesday.

In late April, the firm cut its GDP target for China to 4.2% based on expectations that Covid controls will disrupt supply chains will last longer. That’s down from the prior forecast of 4.6%.

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Categories
Economy

UAE, Saudi Arabia energy ministers hit back at NOPEC bill

UAE Energy Minister Suhail Al Mazrouei says moves by US authorities to introduced NOPEC legislation would bring chaos to energy markets.

AFP | Getty Images

Top OPEC ministers have hit back at new US legislation intended to regulate its output, saying such efforts would bring greater chaos to energy markets.

UAE Energy Minister Suhail Al Mazrouei told CNBC Tuesday that OPEC was being unfairly targeted over the energy crisis, and moves by US lawmakers to disrupt its established system of production could see oil prices shoot up by as much as 300%.

“If you hinder that system, you need to watch what you’re asking for, because having a chaotic market you would see … a 200% or 300% increase in the prices that the world cannot handle,” Al Mazrouei told CNBC’s Dan Murphy during a panel at the World Utilities Congress in Abu Dhabi.

The US Senate Committee on Thursday passed a new bipartisan No Oil Producing and Exporting Cartels (NOPEC) bill with a 17-4 majority, marking a significant step forward in the decades-old proposal.

The bill, which aims to protect US consumers and businesses from engineered spikes in energy prices, would see the alliance open to antitrust lawsuits for orchestrating supply cuts that raise global crude prices.

To take effect, it would now need to be passed by the full Senate and the House, before being signed into law by the president.

OPEC and its partners have faced pressure from consuming countries, including the US and Japan, for not producing more crude oil amid rising prices and surging inflation. As of Tuesday, Brent oil was trading at around $102 a barrel.

Al Mazrouei acknowledged that some members were falling short of their production quotas, but added that the alliance was doing its part to meet global demand amid ongoing geopolitical pressures, namely the war in Ukraine.

“We, OPEC+, cannot compensate for the whole 100% of the world requirement,” he said. “How much we produce, that is our share. And, actually, I would bet that we are doing much more.”

The 23-nation OPEC+ alliance fell short of its quotas by 2.59 million barrels per day in April, according to the latest OPEC+ survey by S&P Global Commodity Insights.

Al Mazrouei was joined on the panel by Saudi Energy Minister Prince Abdulaziz bin Salman, who said that OPEC and non-OPEC members should work in collaboration to tackle the ongoing energy crisis.

“I’m very concerned about the holistic energy system existing today,” he said when asked about the NOPEC bill.

“The world needs to work collectively, responsibly, comprehensively in providing us and salvaging the world economy,” he added.

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