European markets were mixed on Friday morning as investors digested U.S. inflation data that dented confidence in the outlook for Federal Reserve interest rate cuts this year.
The pan-European Stoxx 600 traded flat during early morning deals, with sectors and major bourses pointing in opposite directions.
It comes after data on Thursday showed the U.S. producer price index, which measures pipeline costs for raw, intermediate and finished goods, rose at a faster-than-expected 0.6% in February.
U.S. inflation data is being closely monitored on Wall Street ahead of the Federal Reserve’s two-day policy meeting starting next Tuesday.
The central bank is widely expected to hold its benchmark interest rate next week, although market participants will be searching for clues about when and by how much the Fed could start cutting interest rates over the coming months.
Philip Lane, chief economist at the European Central Bank, told CNBC on Thursday that the ECB must take its time to get interest rate cuts right and the institution will likely have a clearer picture of inflationary pressures in June.
Asia-Pacific markets fell on Friday, led lower by Hong Kong’s Hang Seng index. U.S. stock futures edged lower in overnight trading as investors sought to look beyond the latest inflation reading.
German property giant Vonovia falls 6%
Shares of Vonovia fell 6% on Friday morning shortly after Germany’s largest landlord reported its biggest ever annual loss.
The residential real estate company on Thursday reported an annual loss of 6.76 billion euros ($7.35 billion) for 2023, up from a loss of 669.4 million euros a year earlier.
The figures come at a time when Germany’s homebuilding sector has gone from bad to worse in recent months.
“The collapse of valuations is the worst we have ever seen,” CEO Rolf Buch told reporters, according to Reuters.
— Sam Meredith
European markets open mixed
European markets opened mixed on Friday, with sectors and major bourses pointing in opposite directions.
The pan-European Stoxx 600 traded flat shortly after the opening bell.
— Sam Meredith
CNBC Pro: UBS reveals its most and least preferred semiconductor names, giving one 70% upside
Semiconductor stocks got a lift from the rising tide of artificial intelligence.
But the divergence between semiconductor stocks that are doing well and those that aren’t is becoming starker, UBS said.
Here’s its list of most and least preferred names.
CNBC Pro subscribers can read more here.
— Weizhen Tan
CNBC Pro: Look beyond Nvidia to ride the AI wave — there are other potential winners, Fidelity says
There’s a whole world of stocks beyond flashy AI names such as Nvidia for investors looking to ride the latest tech wave, according to investment firm Fidelity International
The AI boom that started with the launch of ChatGPT in November 2022 has been a particular boon for Nvidia, whose graphics processing units are used to train and run the chatbot. The chip designer’s shares have skyrocketed almost 280% in the past year.
“Rather than focusing on so-called hot AI stocks – because names that are big today may not be the winners of tomorrow – investors may consider the many indirect beneficiaries, or diversified businesses, where the benefits of AI may not be immediately obvious to investors,” Fidelity said in its report.
The investment firm named several alternative sectors it expects to benefit from the AI boom.
CNBC Pro subscribers can read more here.
— Sheila Chiang
European markets: Here are the opening calls
European markets were set to open in negative territory on Friday.
The U.K.’s FTSE 100 index is poised to open around 5 points lower at 7,738, Germany’s DAX down 34 points at 17,902, France’s CAC 18 points lower at 8,145 and Italy’s FTSE MIB down 45 points at 33,172, according to data from IG.
The U.K.’s Berkeley Group is set to provide a trading update on Friday, while data releases include Italy’s final consumer prices figures for February.
— Sam Meredith
