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Shares on the way: Chr. Hansen up 11%, Philips down 11%
Shares in a Danish bioscience company Chr. Hansen jumped more than 11% in early trade after a robust quarterly report and promising outlook.
At the bottom of the Stoxx 600, Philips Shares fell more than 1[ads1]1% after the Dutch health-tech firm issued a third-quarter earnings report highlighting a 1.3 million euro ($1.26 billion) charge for its struggling sleep and respiratory business.
– Elliot Smith
British pound whipsaws after mixed messages from Bank of England
Britain’s economy shrinks by 0.3 percent in August
Britain’s GDP contracted by 0.3% month-on-month in August, the Office for National Statistics said on Wednesday, below expectations for stagnation in a Reuters poll of economists.
The fall in activity was partly driven by weakness in production and maintenance work on oil and gas facilities in the North Sea, the ONS said, while both production and service activity fell.
July GDP growth was revised down to 0.1% from an earlier estimate of 0.2%.
“While this number is not what the country wants to see, it will not make much of a difference to the path we are already on. The Bank of England (BoE) will continue to raise its base rate as it battles to tame runaway inflation, ” said Marcus Brookes, chief investment officer at Quilter Investors.
“The BoE continues to face the incredibly difficult task of guiding the country through this uncertain period where it finds itself in a rock and hard place by raising interest rates to meet inflation but embarking on a gilt-buying operation to help stabilize the markets after the turmoil triggered by the mini-budget.”
– Elliot Smith
CNBC Pro: It’s too early to buy the dip, says investor, naming 8 stocks to buy when the time is right
A fund manager warns against buying the dip, despite a 25% decline S&P 500 this year.
Instead, investors should reposition themselves toward stocks that are sensitive to interest rates, said John Ricciardi, head of asset allocation and fund manager at Deuterium Capital.
He mentions three stocks in the consumer goods sectors, three in utilities and two in materials that investors can acquire when the time is right.
CNBC Pro subscribers can read more here.
The US economy is doing well amid economic uncertainty, says Finance Minister Yellen
Treasury Secretary Janet Yellen said the US is “doing very well” amid global economic uncertainty.
Although the U.S. economy has slowed after a strong recovery, jobs reports indicate a resilient economy, she said in an interview Tuesday with CNBC’s Sara Eisen.
She also acknowledged that inflation is too high and that lowering it is a priority for the Biden administration, stressing the importance of maintaining a healthy labor market while doing so.
— Chelsey Cox, Tanaya Machel
IMF cuts global growth forecast for next year
CNBC Pro: This stock is a better bet than US Treasurys, says fund manager
Nick Griffin, chief investment officer at Munro Partners, is so bullish on one stock, he says it’s a better bet than US Treasurys.
“It’s cheaper than a US Treasury. It’s growing faster than the US Treasury, and it probably has a better balance sheet than the US Treasury. So from our point of view, it’s a pretty safe place to [put your] cash,” he said. Short-term U.S. Treasuries have grown in popularity among investors recently as yields rise.
CNBC Pro subscribers can read more here.
— Weizhen Tan
European markets: Here are the opening calls
European markets are headed for a lower open on Wednesday with global growth concerns dominating sentiment and investors looking ahead to Thursday’s US inflation data
Britain’s FTSE index is expected to open 22 points lower at 6,867, Germany’s DAX down 56 points at 12,148, France’s CAC down 27 points at 5,799 and Italy’s FTSE MIB down 127 points at 20,511, according to data from IG.
On Tuesday, the International Monetary Fund cut its global growth forecast for next year to 2.7 percent. The forecast is 0.2 percentage points lower than the July forecast, and suggests that 2023 will feel like a recession for millions around the world.
European markets closed lower on Tuesday with all major exchanges and most sectors ending trading in the red. The region’s markets have suffered back-to-back losing days as volatility continues to rattle sentiment.
The Bank of England intervened again to restore order to UK markets on Tuesday, with volatility in long-dated government bonds posing what it called a “significant risk to UK financial stability.”
—Holly Ellyatt
