The British pound fell to $1.12 after PM Truss’ speech
The IS British pound dipped to $1.1291 in afternoon trading on Wednesday after a speech by British Prime Minister Liz Truss, who doubled down on her tax cut agenda that was on the market.
“Perhaps she hoped her promise of tripling growth would sway the markets but with nothing new to offer, her words have so far not had the desired effect,” said Susannah Streeter, senior investment and markets analyst , Hargreaves Lansdowne.
“The pound took below $1.14, hovering around $1.135 and 10-year gilt yields rose slightly to a whisker by 4%,” she said in a note at 12.45pm local time.
US stocks open lower
US stocks fell on Wednesday as Wall Street gave up some gains after a sharp two-day rally.
The Dow Jones Industrial Average opened 0.65% lower and the S&P 500 was down 0.7%. The Nasdaq Composite traded down 1% in early markets.
Stocks on the move: GN Store Nord, Nordnet down 7%
Danish hearing aid manufacturer GN Store Nord The Stoxx 600 fell more than 7.5% in mid-afternoon trading.
Swedish financial services company Nordnet also fell 7% after publishing its monthly figures for September.
– Elliot Smith
Individuals must choose the best firms in weak demand conditions: EM strategist
Edmund Harriss, head of Asian & emerging market investments at Guinness Global Investors, discusses market action and consumer demand in the face of a challenging business environment.
Eurozone PMI falls to 20-month low as recession prospect rises
Eurozone business activity fell more than expected last month, increasing the likelihood of a recession in the 19-member common currency bloc.
The final S&P Global euro zone composite PMI (purchasing managers index), seen as a reliable measure of economic health, fell to a 20-month low of 48.1 in September from 48.9 in August, short of a forecast of 48.2. Any reading below 50 indicates contraction.
– Elliot Smith
Stocks moving: Nordnet down 6%, Avanza down 5% after September figures
Swedish financial services companies Avanza and Nordnet fell 5% and 6%, respectively, in early trade after the publication of their monthly figures for September.
At the top of the Stoxx 600, a German chipmaker Infineon 4% was found.
More German companies are planning price increases, says the Ifo Institute
More German companies are planning to raise prices in the coming month, according to a new Ifo Institute survey published on Wednesday.
Economy-wide price expectations for the coming month hit 53.5 points in September, up from a seasonally adjusted 48.1 in August. The food price indicator stood at a full 100 points, up from 96.9 in August.
“Unfortunately, this probably means that the wave of inflation is not about to fall,” says Timo Wollmershäuser, head of forecasters at Ifo.
“Especially when it comes to gas and electricity, the price pipeline is not yet exhausted.”
– Elliot Smith
CNBC Pro: Bank of America reveals its global picks for the quarter, giving one stock over 100% upside
Rising interest rates, rising energy prices and political turmoil in some parts of the world have weighed on stocks going into the final quarter of this year.
To help investors weather the volatility, Bank of America has revealed its best “short-term stock recommendations” for the next quarter, which it expects to “significantly outperform” its peers.
CNBC Pro subscribers can read about five of their favorite stocks here.
— Ganesh Rao
The dollar index falls back to 110
One factor helping equity markets on Tuesday could be a slightly weaker dollar, which is falling for the fifth straight day.
The US Dollar Currency Index DXY was down 1.5% in afternoon trade at 110.06. The index was trading as high as 114.78 last week, when there were concerns about the failure of the UK government bond market.
The British pound and the euro were up more than 1% each against the dollar on Tuesday. The greenback was also down against the Japanese yen.
—Jesse Pound, Gina Francolla
CNBC Pro: Market heading for ‘best week of the year,’ says pro – and names 2 stocks to play it
Market veteran Phil Blancato, whose firm manages more than $4 billion in assets, said he expects next week to be a “turnaround week” for markets.
Investors should take the opportunity to “jump into the market,” he said, as he named two stocks to benefit from the rally ahead.
Pro subscribers can read more here.
— Zavier Ong
Barry Stifel’s Bannister says there is “room for a rally” after two straight days of gains
Stifel chief equity strategist Barry Bannister said stocks can continue to advance after this week’s sharp two-day rally.
“I don’t think you have to worry about a recession until the second half of ’23,” Stifel chief equity strategist Barry Bannister said Tuesday on CNBC’s “Closing Bell: Overtime.” “So there is room for a rally as you go into the early part of next year.”
The strategist said there could be a “conditional pause” at the December meeting as the Federal Reserve reviews the impact of its interest rate hike plan on inflation.
“The leading indicators of inflation are all falling, global liquidity is quite tight. They don’t want to kill the patient to cure the disease,” said Bannister. “And if the data went their way, the break would last, and if the data didn’t go their way, they’d go again and we’d go back down.”
— Sarah Min
CNBC Pro: This is not the bottom of the market, says Morgan Stanley, naming 3 things that must happen first
A market bottom is unlikely to be sustainable unless three conditions are met, according to Morgan Stanley.
“We remind readers that trading the last few moments of every bear market is very challenging as volatility becomes extreme,” they wrote. “None of the conditions we were looking for to end this bear market are in place.”
Pro subscribers can read more here.
— Weizhen Tan
European Markets: These are the initial calls
European markets are poised for a negative opening on Thursday as investors assess continued economic uncertainty.
The UK’s FTSE index is expected to open 37 points lower at 6,899, Germany’s DAX down 106 points at 12,635 and France’s CAC down 52 points at 5,988, according to data from IG.
Regional markets closed slightly lower on Wednesday evening as traders digested new inflation data for the UK and assessed expectations of a rate hike and recession fears.
The UK reported a rise in the consumer price index to 10.1% on Wednesday, matching the 40-year high level set by the Office for National Statistics in July. Food, energy and transport prices caused the increase.
As for data in Europe, French business climate data for October is due. Earnings are due from Hermes, Kering, L’Oreal, Pernod Ricard, Vivendi, Akzonobel, ABB, Nokia and Volvo Group.
— Holly Elliott