European markets rise as investors await Fed minutes

French inflation slows unexpectedly

The skyline of the Arc de Triomphe in Paris, France.

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Inflation in France slowed to 6.7% in December from a record 7.1% the previous month, according to preliminary figures released Wednesday morning.

Economists polled by Reuters had forecast consistent year-on-year inflation, adjusted for eurozone comparisons, at 7.2%.

The biggest drop was in energy, where prices rose 15.1% year-on-year, down from 18.4% in November.

This follows a more than expected slowdown in inflation in Germany, which on Tuesday announced a drop in the HICP to 9.6% from 11.3%; and in Spain, which recorded a drop last week to 5.8% from 6.7%.

Analysts are looking for signs of a spike in inflation in major eurozone economies; and whether that will influence the European Central Bank, which previously said interest rates are set to rise “significantly”.

ING analysts said the path to a substantial drop in inflation rates would not be easy and the outlook remains dependent on factors such as warmer weather and continued pressure from pipelines affecting energy prices. ; war and challenges in the agricultural sector affecting food prices; and government support programs.

“[Germany’s] the inflation figures are not a relief, but only a reminder that eurozone inflation is still primarily an energy price phenomenon,” they said in a note. “The ECB cannot not and will not base policy decisions on highly volatile energy prices”.

They expect hikes totaling 100 basis points in the next two meetings and an updated macro forecast in March.

Italy will report inflation figures on Thursday, followed by a flash estimate for the eurozone on Friday.

—Jenni Reid

Swiss annual inflation at 2.8% in 2022

Swiss consumer prices rose 2.8% year-on-year and fell 0.2% from December, the Federal Statistical Office announced today.

He found that Swiss inflation averaged 2.8% in 2022, down from 0.6% in 2021. He attributed the annual rise to rising costs for petroleum products, gasoline, cars and rental of houses, which compensated for the fall in the prices of medicines and fixed and mobile communications.

Stocks on the move: BKW up 4%, Tenaris down 5%

Swiss electricity supplier BKW jumped 6% in early trading to top the Stoxx 600 after projecting an “outstanding” annual result for 2022.

Italian manufacturer of steel tubes Tenaris fell 5% to the bottom of the European blue chip index.

-Elliot Smith

CNBC Pro: Analysts See These 10 Global Renewable Energy Stocks Rise Despite Higher Rates, With One Offering a 50% Upside

Soaring energy prices have spurred investment in renewable energy across the world.

Swiss investment bank UBS has named 10 major renewable energy players that are capitalizing on the trend and expected to outperform next year.

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—Ganesh Rao

CNBC Pro: Wall Street bullish on this chip giant, Morgan Stanley giving it 55% upside

The once-hot chip sector has suffered in 2022, but Wall Street appears to be getting more bullish on semiconductor stocks for the year ahead.

Recently, several pros have been urging investors to take a longer-term view of the industry, given the importance of chips in several key secular trends.

Analysts have named one particular stock they are bullish on, citing its earnings potential and future profitability.

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—Weizhen Tan

The United States will avoid recession in 2023, according to Goldman Sachs

Goldman Sachs has a non-consensus forecast for the US economy in 2023.

“Our economists continue to believe that the United States will avoid recession as the Fed successfully engineer a soft landing for the economy,” analysts wrote Tuesday.

“This non-consensus forecast partly reflects our view that a period of below-potential growth is sufficient to gradually rebalance the labor market and ease wage and price pressures,” the note said. “But it also reflects our analysis which indicates that the drag on fiscal and monetary policy tightening will decline sharply next year, contrary to the consensus view that the lagged effects of interest rate hikes will lead to a recession in 2023. .”

Additionally, the bank today raised its 4Q22 GDP growth forecast by 10 basis points to +2.1% on the back of a surprisingly strong November construction spending release.

“The disconnect between the resilience of the U.S. economy in 2022 and the decline experienced by equities has been a key narrative of the past year,” Goldman said. “And whether this disconnect continues, or whether the economy matches the downdraft of the market, or whether the market rebounds from a soft landing in the economy, that can at least be part of the 2023 narrative. .”

—Carmen Reinicke

CNBC Pro screens low-volatility stocks amid fears of bumpy ride ahead

Stock markets endured a horrific 2022 as major indexes posted their worst performances in more than a decade.

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— Zavier Ong

European markets: here are the opening calls

European markets are heading for a higher open on Wednesday as investors await the final minutes from the U.S. Federal Reserve, looking for signs of interest rates ahead.

The United Kingdom FTSE100 the index is expected to open 11 points higher at 7,570, Germany DAX 28 points more at 14,227, France CAC up 9 points to 6,643 and Italy MIB FTSE up 31 points to 24,449, according to IG data.

In Europe on Tuesday, markets closed higher, buoyed after Germany released lower-than-expected December inflation figures at 9.6% year-on-year. Inflation figures in France are expected on Wednesday.

—Holly Ellyatt

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