European markets opened higher on Tuesday, reversing negative sentiment in the region, but investors will be keeping a close eye on borrowing costs for a number of core European economies this week as bond yields remain elevated.
The pan-European Stoxx 600 index rose 0.5% shortly after the opening bell, with most sectors in positive territory. Autos, chemicals and tech stocks led the gains.
Major European stock markets fell on Monday amid worries over rising government bond yields and a surging U.S. dollar, with the pan-European Stoxx 600 index seeing most sectors closing in the red.
Euro zone and U.K. government bond yields, as well as U.S. Treasurys, are being closely watched this week after the interest rate on short and long-dated government debt climbed to fresh multi-month highs last week and remained elevated on Monday.
Asia-Pacific markets and U.S. stock futures rose overnight as investors braced themselves for the U.S.’ latest producer price index, which measures wholesale inflation. Economists polled by Dow Jones predict that headline PPI grew 0.4%, while the core figure, which excludes food and energy, rose 0.3%.
The reading comes ahead of the closely followed consumer price index report on Wednesday. Both reports will inform the Federal Reserve’s next move on interest rates.
— CNBC’s Brian Evans contributed to this market summary.
JD Sports shares tumble
LONDON, UNITED KINGDOM – 2021/05/17: A scene outside JD sport shop. (Photo by May James/SOPA Images/LightRocket via Getty Images)
Sopa Images | Lightrocket | Getty Images
Shares of British sportswear retailer JD Sports were down 10.5% at 8:20 a.m. London time, after the company posted a trading update in which it downgraded its profit guidance.
JD Sports said it now expected pretax profit before adjusting items to come in between £915 million ($1.12 billion) and £935 million for its fiscal year. Back in November, the firm had given a guidance range of £955 million to £1.035 billion.
— Chloe Taylor
Weaker refinery margins to ripple into BP fourth-quarter results
British energy major BP on Tuesday said that weaker refinery margins and turnaround activity will deliver a $100 million to $300 million blow to its fourth-quarter profit, with further declines expected in oil production.
The company, which reports quarterly and full-year 2024 earnings on Feb. 11, said in a trading update that the results of its oil production and operations segment will lead to a $200 million to $400 million dent in the fourth quarter, given price lags on its output in the Gulf of Mexico and the UAE. Oil trading performance is consequently expected to be weak across the period.
BP said that its activity in gas and low-carbon energy will boost fourth-quarter results by $100 million to $200 million, including changes in prices that are not linked to the Henry Hub gas marker. The major forecasts gas trading to be “average” during the timeframe, despite this.
In the upstream segment, BP anticipates lower fourth-quarter output than in the third quarter across both oil and gas and low carbon. Despite this, the company sees overall full-year 2024 production as coming in “slightly higher” than in 2023.
More broadly, the company expects non-cash, post-tax charges connected to $1 billion to $2 billion of impairments across all of its segments in the fourth quarter.
British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.
Nurphoto | Nurphoto | Getty Images
BP has been weathering the storm of oil price declines hitting revenues and scandals associated with the departure of former chief Bernard Looney. CEO Murray Auchincloss is expected to leverage the company’s capital markets event to bolster confidence in the major’s strategy.
On Tuesday, BP said that the event, previously scheduled for Feb. 11 in New York, has been postponed to Feb. 26 in London. It further noted that Auchincloss is “recovering well” from a planned medical procedure and will return to office next month.
BP shares were down 2.75% at 08:02 a.m. London time, just after open.
— Ruxandra Iordache
Euro, sterling gain ground
After hitting multi-year lows against the U.S. dollar on Monday, Europe’s major currencies gained momentum on Tuesday morning.
The euro and the British pound were both up by around 0.1% at 7:33 a.m. London time. The dollar index — which measures the greenback against a basket of rival currencies — hit its highest level in more than two years on Monday, following hotter-than-expected U.S. jobs data late last week.
— Chloe Taylor
CNBC Pro: Tech stocks ruled in 2024. One pro picks 3 under-the-radar stocks to play this year
Tech stocks continued to reign supreme among investors in 2024 with many investors favoring some of the so-called Magnificent Seven stocks of Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia and Tesla, as well as other lesser-known small- and medium-sized companies.
Principal Asset Management’s Martin Frandsen continues to see potential in the Magnificent Seven this year, but also sees value in other stocks within the sector.
Elsewhere, Michele Schneider, chief market strategist at Marketgauge.com sees opportunities in a range of high-growth sectors that are “poised to offer substantial returns for strategic reallocations of undervalued assets.”
She also revealed three tech stocks she’s betting on right now.
CNBC Pro subscribers can read more here.
— Amala Balakrishner
S&P 500, Dow close higher while Nasdaq falls Monday
The S&P 500 and Dow Jones Industrial Average ended Monday’s session in the green.
The broad market index added 0.16%, while the Dow rose 0.86%.
The tech-heavy Nasdaq Composite underperformed the market and closed 0.38% lower.
— Hakyung Kim
European markets: Here are the opening calls
European markets are expected to open higher Tuesday.
The U.K.’s FTSE 100 index is expected to open 4 points higher at 8,226, Germany’s DAX up 106 points at 20,241, France’s CAC up 66 points at 7,472 and Italy’s FTSE MIB up 272 points at 35,082, according to data from IG.
Trading updates are set to come from Ocado, JD Sports, Persimmon and OMV on Tuesday. Lindt & Sprüngli will release its latest earnings.
— Holly Ellyatt
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