European markets recover after BoE steps in to calm markets
Porsche shares rise in Frankfurt market debut
Porsche shares rose almost 2% over the IPO in its IPO on Thursday, in what is being billed as one of Europe’s biggest public offerings ever.
Shares in the luxury car maker initially traded at 84 euros ($81) at the start of the day.
The shares had been priced at the top of the range late Wednesday, valuing the company at 75 billion euros.
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—Hannah Ward-Glenton
Shares on the move: Rational up 12%, Barratt Developments down 9%
Rational shares jumped more than 12% in early trade to lead the Stoxx 600 after the German combi steamer and oven maker raised its sales revenue and profit forecast for 2022.
At the bottom of the European blue chip index, British property developer Barratt Developments fell more than 9%.
CNBC Pro: Analyst says this FAANG stock is an evergreen winner — and investors should buy the dip
Tech stocks have had a difficult year so far, but a Rosenblatt Securities analyst believes the selloff is an opportunity for long-term investors to buy the decline.
“Stay away from the losers,” he said, recommending “winners in the various secular battles and evolutionary battles” in technology.
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— Zavier Ong
Stocks could continue this “oversold rally” over the next few days, says Wells Fargo’s Harvey
Wells Fargo’s Chris Harvey expects stocks to continue moving higher.
“The spike in short interest, skew in retail sales and the BOE’s action suggest stocks will continue their oversold bounce in the coming days,” he said in a note to clients on Wednesday.
Stocks hit new lows earlier in the week, with the S&P 500 experiencing another bear market. The sell-off was triggered by the Fed’s latest interest rate decision last week, which some investors believe steered the market into oversold conditions.
As the cost of capital rises and prices approach record highs, the consensus is increasingly coming to believe that a Fed-induced recession is inevitable, Harvey said.
“We look at a recession like a car accident,” he wrote. “You never know how bad it will be, but there is hardly any ‘better than expected’ outcome – so politicians need to be careful what they wish for.”
– Samantha Subin
10-year government interest rate falls the most since 2020
The yield on the benchmark 10-year government bond index fell by the most since 2020 on Wednesday, despite a brief peak of 4% earlier in the session, after the Bank of England announced a bond-buying plan to stabilize the British pound.
The 10-year Treasury yield last fell 23 basis points to 3.733%, the most it has fallen since 2020.
It peaked 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 47 points lower at 7,341, Germany’s DAX 86 points lower at 13,106, France’s CAC 40 down 28 points and Italy’s FTSE MIB 132 points lower at 22,010, according to data from IG.
Global markets have pulled back after a higher-than-expected U.S. consumer price index report for August showed prices rose 0.1% for the month and 8.3% annually in August, the Bureau of Labor Statistics reported on Tuesday, defying economists’ expectations for headline inflation. will fall 0.1% month on month.
The 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 out, and Eurozone industrial production for July will be published.
—Holly Ellyatt
