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German October wholesale inflation well below expectations

Germany’s producer price index came in at -4.2% month-on-month in October, the federal statistics office said on Monday, well below the Reuters consensus forecast for a 0.9% increase.

On an annual basis, wholesale prices were up 34.5%, below expectations for a rise of 41.5%.

– Elliot Smith

Stocks on the way: Virgin Money up 13%, IDS down 5%

Virgin money shares jumped more than 1[ads1]3% to lead the Stoxx 600 in early trade after the company reported a rise in pre-tax profit for the 2022 financial year and announced a £50m ($59.4m) share buyback programme.

At the bottom of the index, shares International distribution services — trading as Royal Mail — fell 5% as the company faces further waves of damaging industrial action by workers over the festive period.

Oil prices fall as China faces Covid concerns, Goldman Sachs cuts forecast

Oil prices fell by almost a dollar as concerns about Covid in China grew, and the nation saw the first virus-related deaths recorded since May this year.

Brent crude futures shed less than a dollar, or 0.9%, to stand at $86.83 a barrel and US West Texas Intermediate futures fell 1.09% to $79.21 a barrel.

Goldman Sachs cut its forecast for Brent crude by $10 to $100 a barrel for the fourth quarter of 2022, citing dented China demand with growing Covid concerns and insufficient details from the latest Group of 7 nation’s price cap on Russian oil.

“We believe the market is right to be anxious about fundamentals,” economists including Jeffrey Currie said in the note, adding that the potential for further shutdowns in China equates to the latest production cut by OPEC+.

– Lee Ying Shan

CNBC Pro: Strategist Says Chinese Tech Stocks, Like Alibaba, Are ‘Deeply Undervalued’

This year’s 30% decline in the value of Chinese Big Tech shares, such as Ali Babahas made them “incredibly cheap”, according to investment bank China Renaissance.

Equity chief Andrew Maynard believes not only does the stock market appear to have bottomed, but investors could miss out on a rally if they remain underweight China.

“Without a shadow of a doubt, being underweight China will cost you going forward,” Maynard said.

CNBC Pro subscribers can read more here.

– Ganesh Rao

Markets are looking for more clues about Fed hikes and the economy in the week ahead

Investors may be a little more cautious in the week ahead, with stocks searching for direction in quiet trading and bond market warnings of a recession intensifying.

The Thanksgiving holiday on Thursday should mean markets are likely to be quiet on Wednesday and Friday. Retailers will monitor Black Friday shopping reports for consumer feedback.

“It really is a week where data addiction is the key phrase,” said Julian Emanuel, senior managing director at Evercore ISI. “The premise [for stocks] is higher unless the data continues to deteriorate and the Fed holds on to its hawkish bias… which has clearly strengthened over the past 48 hours.”

Check out our full deep dive on what to expect in the coming week here.

— Patti Domm, Tanaya Machel

CNBC Pro: Morgan Stanley’s Mike Wilson predicts S&P 500 bottom, calls it a ‘fantastic buying opportunity’

Morgan Stanley’s US equity strategist Mike Wilson says we are in the “end phase” of the bear market, but the situation will remain challenging for some time to come.

He predicts when – and at what level – the S&P 500 will hit a “new low”.

CNBC Pro subscribers can read more here.

— Weizhen Tan

European markets: Here are the opening calls

European markets are set to open lower on Monday as investors continue to monitor the uncertain economic outlook.

Britain’s FTSE index is expected to open 15 points lower at 7,386, Germany’s DAX down 54 points at 14,378, France’s CAC down 17 points at 6,629 and Italy’s FTSE MIB down 54 points at 24,445, according to data from IG.

There are no big earnings on Monday. Data releases include German producer prices for October.

—Holly Ellyatt

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