European markets moved lower Thursday morning as investors await the latest U.S. inflation data for more signs that price pressures are easing.
The pan-European Stoxx 600 was down 0.14% by 9:35 a.m. London time, with most sectors and major bourses shifting into the red.
Insurance stocks led gains, up 0.49%, as Hurricane Milton’s devastating hit to Florida pointed to stronger prospects for the sector. On the other end, autos shed 0.55% as competition pressures add to continued troubles for European carmakers.
Economists polled by Dow Jones anticipate a 0.1% increase on a monthly basis, and a 2.3% advance over the prior 12 months.
The result will also inform the Federal Reserve’s next steps on policy at its November meeting. Fed funds futures trading data suggests a roughly 70% likelihood of a quarter-point cut, according to CME Group’s FedWatch tool.
U.S. stock futures were little changed Wednesday night, while Asia-Pacific markets opened mostly higher on Thursday, buoyed by gains on Wall Street on Wednesday.
The S&P 500 and Dow Jones Industrial Average reached new records as investors shook off geopolitical concerns and reacted to the release of minutes from the Fed’s September meeting, at which it cut its key rate by 50 basis points, and revealed that a “substantial majority of participants” had favored reducing interest rates by the larger amount.
Fed policy ‘too aggressive’ for the state of U.S. economy, strategist says
Dhaval Joshi, chief strategist at BCA Research, weighs in on the Federal Reserve’s minutes, saying the central bank may have moved too sharply in its initial rate cut.
“The amount of easing that’s been priced in is a bit too aggressive for the state of the economy and the jobs market at the moment,” Joshi told CNBC’s “Squawk Box Europe.“
— Karen Gilchrist
Airbus September deliveries down year on year
An Airbus A330-941 is being delivered to Delta Air Lines, flying from Toulouse Blagnac Airport to Atlanta, in Toulouse, France, on December 8, 2023.
JoanValls | Nurphoto | Getty Images
Airbus delivered 50 aircraft in September, the European planemaker said Thursday, a fall from 55 the previous year.
It takes Airbus deliveries to 497 in the year-to-date, out of its recently downwardly revised target of “around 770.”
Analysts at Deutsche Bank and Citi said meeting this target was not impossible, but would require a ramp-up in activity in the final quarter.
The aviation industry is continuing to wade through production challenges and supply chain shortages, leading to hefty order backlogs at the likes of Airbus and Boeing.
Airbus shares were 0.6% higher at 10 a.m. London time.
— Jenni Reid
Mercedes-Benz’ sales drop in third quarter
Preparations at the Mercedes-Benz booth with the Mercedes-Benz Vision EQXX automobile ahead of the Munich Motor Show (IAA) in Munich, Germany, on Sunday, Sept. 3, 2023. The biennial motor show, one of Europe’s most important automotive events, opens on Tuesday, Sept. 5, with the future of the car industry in the balance. Photographer: Alex Kraus/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Shares of German carmaker Mercedes-Benz dipped by 0.35% after the company reported a slight drop in third-quarter car sales amid reduced demand, particularly in Asia.
Over the period, the manufacturer sold 503,600 cars, down 1% year-on-year. The group’s electric car sales fell 31% to 42,500. In China, sales were down 13%.
— Karen Gilchrist
Stocks on the move: GSK up 6.3%; Taylor Wimpey down 3.4%
In this photo illustration, silhouette of hands in medical gloves hold a medical syringe and a vial in front of GSK (GlaxoSmithKline) logo of a pharmaceutical industry company.
Pavlo Gonchar | Lightrocket | Getty Images
Shares of British drugmaker GSK rose to the top of the Stoxx 600 in early deals, adding 6.3%, after the company struck a deal to pay up to $2.2 billion to resolve a U.S. lawsuit over its heartburn treatment Zantac.
On the other end, British homebuilder Taylor Wimpey fell 3.4% amid a wider fall in construction stocks. The sector was down 0.55% by 8:25 a.m. London time.
— Karen Gilchrist
European markets open slightly higher
European markets opened marginally higher Thursday as investors await the latest U.S. inflation data for more signs that price pressures are easing.
The pan-European Stoxx 600 was up 0.15% in opening trade, with sectors and major bourses diverging.
Insurance stocks led gains, up 0.61%, as Hurricane Milton’s devastating hit to Florida pointed to stronger prospects for the sector. On the other end, autos shed 0.84% as competition pressures add to continued troubles for European carmakers.
— Karen Gilchrist
Germany downgrades growth outlook
Shoppers at the Alexanderplatz in Berlin, Germany, on Wednesday, Sept. 25, 2024.
Krisztian Bocsi | Bloomberg | Getty Images
Germany is expecting its first two-year recession in almost two decades, the government said, downgrading its 2024 growth forecast for the euro zone’s largest economy.
Economy Minister Robert Habeck predicted late Wednesday that gross domestic product would shrink 0.2% this year, down from an earlier forecast of 0.3% growth.
Separately, retail sales rose 1.6% in August versus the previous month, fresh data showed Thursday.
— Karen Gilchrist
Italgas acquires 2i Rete Gas
Italian natural gas distributor Italgas agreed to buy smaller rival 2i Rete Gas in a deal which will see it invest 15.6 billion euros ($17 billion) in its operations up to 2030.
Italgas CEO Paolo Gallo told CNBC Thursday that the deal would enable it to create a “European champion” in the gas sector.
“Only large players … will be able to support the energy transition and the ambitious targets that the European Union has set,” he told CNBC’s “Squawk Box Europe.”
— Karen Gilchrist
China’s central bank launches $71 billion liquidity tool for stock markets
China’s central bank announced it would start accepting applications from financial institutions to join a newly created liquidity tool to help facilitate investors to buy shares.
Eligible security firms, fund companies and insurers are eligible to apply to the “swap scheme” — initially worth 500 billion yuan ($70.7 billion) — to get easier access to funding to buy stocks, People’s Bank of China said.
— Dylan Butts
CNBC Pro: These cheap stocks are outperforming, and analysts give 5 more than 20% upside
Markets just keep rallying this year, with the S&P 500 up nearly 22% year-to-date and the Nasdaq jumping around 21%. In global stocks, the MSCI World index is around 16% higher.
Many on Wall Street expect the trend to continue. Goldman Sachs, Morgan Stanley and others all see the S&P 500 around 6,000 by the end of the year, up from around 5,730 on Tuesday.
With markets already running high, CNBC Pro screened for global stocks that have outperformed the MSCI World index, but still look cheap based on their forward price-to-earnings ratios.
CNBC Pro subscribers can read more here.
— Weizhen Tan
Rio Tinto on pace for longest losing streak in more than three years
Shares of Rio Tinto fell 0.5%% in afternoon trading, putting the stock on track for its eighth consecutive day of losses. If the stock closes lower, this will mark its longest losing streak since March 23, 2021, when it saw eight straight days in the red.
The move comes after the miner announced it’s acquiring fellow miner Arcadium Lithium in an all-cash transaction for $5.85 per share. Shares of that company surged more than 30% during Wednesday’s session.
RIO vs. ALTM, 1-day
— Sean Conlon
European markets: Here are the opening calls
European markets are expected to open higher Thursday.
The U.K.’s FTSE 100 index is expected to open 29 points higher at 8,318, Germany’s DAX up 41 points at 19,299, France’s CAC up 7 points at 7,574 and Italy’s FTSE MIB up 27 points at 33,856, according to data from IG.
Data releases to watch out for include the IMF’s latest World Economic Outlook report, Italy’s industrial production figures and U.S. inflation data out later in the day. Givaudan publishes third-quarter sales figures.
— Holly Ellyatt
