European stocks fall as Bank of England stimulus fades; Stoxx 600 down 1.6%
The economic climate in the eurozone continues to deteriorate
The European Commission’s economic confidence indicator, which aggregates business and consumer confidence surveys, fell to 93.7 in September from 97.3 in August, its lowest point since November 2020.
Confidence plummeted across all economic sectors amid a general rise in inflation expectations, despite the European Central Bank’s pledge to raise interest rates to curb soaring prices.
Porsche shares rise in Frankfurt market debut
Shares of Porsche rose nearly 2% above its IPO price when it debuted Thursday, in what is being billed as one of the biggest public offerings ever in Europe.
Shares of the luxury automaker initially traded at 84 euros ($81) at the start of the day.
The shares had been valued at the high end of their range on Wednesday evening, taking the company’s value to 75 billion euros.
Read CNBC’s full coverage here.
Stocks on the move: Rational up 12%, Barratt Developments down 9%
Rational stocks jumped more than 12% in early trade to top the Stoxx 600 after the German oven and combi-oven maker raised its revenue and profit forecast for 2022.
At the bottom of the European blue chip index, UK property developer Barratt Developments fell more than 9%.
CNBC Pro: Analyst Says This FAANG Stock Is An Evergreen Gainer — And Investors Should Buy The Dip
Tech stocks have had a tough year so far, but an analyst at Rosenblatt Securities thinks the selloff is an opportunity for long-term investors to buy the dip.
“Stay away from losers,” he said, recommending “winners in the various age-old battles and evolutionary battles” in technology.
Pro subscribers can learn more.
— Zavier Ong
Stocks could continue this ‘oversold bounce’ over the next few days, according to Wells Fargo’s Harvey
Wells Fargo’s Chris Harvey expects stocks to continue their upward move.
“The spike in short-term interest, the retail bias and BOE action all suggest stocks will continue their oversold rebound over the next few days,” he said in a statement on Wednesday. note to customers.
Stocks hit new lows earlier in the week, with the S&P 500 recording another bear market. The selloff was triggered by the Fed’s latest rate decision last week, which some investors said sent the market into oversold conditions.
As the cost of capital rises and prices approach record highs, the consensus is growing that a Fed-led recession is inevitable, Harvey said.
“We view a recession as a car accident,” he wrote. “You never know how bad it will be, but there’s almost no ‘better than expected’ outcome – so policy makers have to be careful what they wish for.”
— Samantha Subin
10-year Treasury yield falls the most since 2020
The yield on the benchmark 10-year Treasury note fell the most since 2020 on Wednesday, despite briefly overshooting 4% earlier in the session, after the Bank of England announced a plan to buy bonds for stabilize the pound sterling.
The 10-year Treasury yield last fell 23 basis points to 3.733%, the highest since 2020.
It hit a high of around 4.019%, a key level that was the highest since October 2008 earlier in the day before erasing those gains.
Yields and prices move in opposite directions. One basis point is equal to 0.01%.
European markets: here are the opening calls
European stocks are expected to open in negative territory on Wednesday as investors react to the latest US inflation data.
Britain’s FTSE index is expected to open down 47 points to 7,341, Germany’s DAX down 86 points to 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB down 132 points to 22,010 , according to data from IG.
Global markets fell following a stronger-than-expected U.S. consumer price index report for August, which showed prices rose 0.1% for the month and by 8.3% a year in August, the Bureau of Labor Statistics reported on Tuesday, defying economists’ expectations that headline inflation would fall 0.1% month-over-month.
Core CPI, which excludes volatile food and energy costs, rose 0.6% from July and 6.3% from August 2021.
UK Inflation figures for August are due and Eurozone Industrial Production for July will be released.